LONDON (MNI) – Foreign investors were net buyers of gilts in July,
ending a five-month run in which they were net sellers, according to new
data from the Bank of England.

The BOE’s Bankstats figures show non-residents increased their gilt
holdings by stg9.358 billion in July after having reduced their holdings
by a total of stg16.771 billion in the previous five months combined.

The data also show that foreign investors reduced their holdings of
UK Treasury Bills, cutting their exposure by stg409 million after having
increased it by stg1.508 billion in June.

Banks’ holdings of high quality sterling liquid assets (gilts,
treasury bills, and deposits at the BOE) rose to stg368 billion or 9.9%
of their sterling assets in July, up from the stg357 billion or 9.6% of
sterling assets held in June.

Seperate data from the BOE showed lending rates rising and deposit
rates falling, with bank margins widening.

The rate paid on households’ outstanding time deposits fell by 2bps
to 2.85% in July although the rate for households’ new time deposits
increased by 1bp to 3.11%. The lending rate on secured loans rose to
3.37% from 3.35% in June, and held steady at 3.82% for secured new
business loans.

-London newsroom: 4420 7862 7491 e-mail: wwilkes@marketnews.com

[TOPICS: M$B$$$,M$$BE$]