September 26, 2012 / 10:54 AM / 5 years ago

UK debt chief says ECB bond plan may pressure gilts

LONDON (Reuters) - A plan by the European Central Bank to buy the sovereign bonds of stricken euro zone countries could reduce the safe-haven appeal of gilts though it has not done so yet, Britain’s chief debt issuer said on Wednesday.

“There could be a fading of what I would call, bluntly, the panic-buying,” Debt Management Office chief executive Robert Stheeman told Reuters.

“It could. I don’t think that’s really happened yet,” he said on the sidelines of the Euromoney Sterling Conference, when asked about the scheme unveiled earlier this month but not activated so far.

But he added: “The safe-haven aspect, while we don’t rely on it and it may not last forever, is unlikely to go away in its entirety because... we have an institutional framework in the United Kingdom of a government pursuing a certain fiscal policy alongside an independent central bank setting monetary policy for the benefit of the UK economy as a whole.”

Reporting by Olesya Dmitracova

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