LONDON, Sept 19 (KUNA) -- The UK government minister Lord Sassoon is to lead an investor road-trip to the Middle East as Britain plans to sell more of its debt in the international market, it was revealed here Sunday.
The Treasury Minister will boost a delegation that includes Robert Stheeman, the head of the UK's Debt Management Office, and other Government officials, tasked with explaining the case for buying gilts, the Sunday Telegraph newspaper said. Lord Sassoon told The Telegraph: "Ministers usually go abroad to talk to investors about trade relations or equity investments. "Debt has not been an issue previously. But now we have this huge increase in debt burden, things have changed. Even though the outlook is favourable on gilts, I think it is right to pay investors the courtesy of seeing them face to face and listening to their concerns and understanding what they want." The tour will last four days and take in ministers, investors and sovereign wealth funds in Saudi Arabia, Dubai, Abu Dhabi and Kuwait. The delegation will explain the Coalition Government's new economic and fiscal policies and reassuring investors that the UK will not follow Greece and other European countries into a sovereign debt crisis. One London-based sovereign debt specialist said: "There's a suspicion in the markets that the UK is teetering on the edge of a crisis. Clearly gilts have held up despite it all but this delegation is a good idea to cement investors' faith." He added: "There's a huge amount of money looking to be deployed and the Government is right to tap into it for a more stable base." Lord Sassoon, who is thought to be the first Government minister for decades to lead a delegation to sell British debt, said: "It's good to be able to talk to investors at a time when the outlook is good for gilts, rather than have to try and sell the story at a time of stress like the Greek and Spanish governments." Last week Mervyn King, the Governor of the Bank of England, warned the trade unions that Britain must push through a "credible" deficit-cutting plan to avoid the soaring borrowing costs that have afflicted some eurozone nations. He told the Trade Union Congress conference in Manchester, northern England: "Market reaction to rising sovereign debt can turn quickly from benign to malign, as we saw in the euro area earlier this year. It is not sensible to risk a damaging rise in long-term interest rates that would make investment and the cost of mortgages more expensive." The UK already has a strong trade agreement with the Gulf. In 2009 it signed a memo of understanding with UAE that set a target to increase bilateral trade by 60pc to 12 billion pounds. Last year, Britain exported more goods and services to the Gulf states than India and China combined. At the same time, the Gulf states have invested millions in buying stakes in UK companies and properties, the paper pointed out. (end) he.mt KUNA 191321 Sep 10NNNN