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<p>NS&I must balance the interests of savers, taxpayers and the broader financial
services sector.</p><p> </p><p>After 6 months of offering often market-leading rates,
NS&I has announced interest rate reductions that will realign it with the rest
of the retail savings market.</p><p> </p><p>NS&I’s Net Financing target for 2020-21
was revised from £6 billion to £35 billion to reflect the Government’s funding requirements
during the Covid-19 pandemic. NS&I raised £14.5 billion in Net Financing from
April to June. Demand for NS&I products has remained at similarly high levels
since then, making rate reductions necessary.</p><p> </p><p>With gilt yields currently
at very low levels, government financing raised through NS&I is much more expensive
that that raised through gilt issuance. It is important that HM Treasury takes into
account taxpayer value considerations when making financing decisions.</p><p> </p>
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