London Investors Brace for Gilts Flood as British Deficit Soars.

Byline: Allister Heath

Jan. 12--The City of London is bracing itself for the UK Treasury's first gilt issuance of the year on Wednesday -- as Britain's soaring budget deficit threatens to flood the market with government debt in coming months, putting upward pressure on yields.

Gross gilt issuance could reach UKpound 50 billion (E75 billion) this year, with net issuance of between UKpound 25 billion (E37.5 billion) and UKpound 30 billion (E45 billion), compared with roughly zero last year and negative net issuance in recent years, according to Citigroup.