§ We also propose an important extension of the structure of Government borrowing by introducing an indexed gilt-edged security. This will be sold to pension funds and to life insurance companies and friendly societies in respect of their United Kingdom pension business.
§ Restricting the right to buy this indexed gilt will help to avoid the risk of attracting unwanted inflows of foreign funds. It will give those institutions that are eligible a new choice between indexed and conventional securities. The Bank of England is announcing this afternoon details of an issue of long-dated indexed stock worth £1 billion.
§ This innovation demonstrates the confidence that we have in our strategy for bringing inflation down. It will also reduce uncertainty about future real rates of return, thus helping borrowers and lenders alike. Those are important advantages for monetary control. We will have more flexibility in the market place and thus greater assurance of meeting the Government's borrowing needs.
§ We are also considering the introduction, later in the year, of new short-term marketable Government securities.