He said that the head of the Debt Management Office has the “toughest job” in the UK and has to shift around £1bn of gilts every working day next year.
He said: “Sell gilts and keep selling gilts. They are totally artificial, they are totally the wrong price. The yield is much too low and a hell of a lot of them are going to have to be put out.”
Tory MP Richard Spring said £197bn of gilts have to be sold next year, according to Government estimates. He pointed out that two-thirds of gilt sales go to overseas investors and this big increase in supply may mean that they will not see the value in buying them and go to gilt markets elsewhere.
He said: “I just hope that the Government is able to flog the bonds into this market because otherwise we risk problems in sterling and the inability to sell and all the implications that flow from that.”