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<p>As the Chancellor has made clear publicly before, the government will continue
to use the markets as its primary source of financing.</p><p> </p><p>HM Treasury and
the Bank of England (“the Bank”) announced in March 2020 that the government’s long-established
Ways and Means (W&M) facility could, if necessary, play a role in providing a
short-term source of additional liquidity to the government to smooth its cashflows
and support the orderly functioning of markets, through the period of disruption from
Covid-19. It was agreed that any use of the W&M facility was to be repaid as soon
as possible before the end of the year.</p><p> </p><p>The W&M facility is the
government’s long-established overdraft at the Bank. Ordinarily, a standing balance
of around £400m is maintained in the W&M facility to support Exchequer cash management.
That remained the case throughout 2020-21 (a period during which the W&M facility
had not been drawn on).</p><p> </p><p>HM Treasury, the Debt Management Office and
the Bank continue to cooperate closely to support the orderly functioning of the gilt
and sterling money markets.</p>
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