The UK Debt Management.........>

GILT AUCTION PREVIEW: The UK Debt Management Office will tap the 0.125% Aug-28

IL Gilt today for Stg 1.1bln

- BACKGROUND: There is Stg. 1.38bln outstanding of the 0.125% Aug-28 IL Gilt.

- HISTORY/RV: The gilt curve has shifted lower since the beginning of August,

with the 2s10s spread narrowing to 52.3bps from 59.2bps. Market-based measures

of longer-term inflation expectations have deteriorated very slightly over the

past week with the 10-year breakeven edging down to 3.065% from 3.061%. The

0.125% Aug-28 IL Gilt has rallied over the course of August and currently trades

at a yield of -1.814% down from -1.660%. The European issuance calendar is light

this week, with no significant redemptions or coupon payments to support the

gilt auction.

- TIMING: Results are due shortly after the auction closes at 0930 GMT