UK GOLD SALES 2001-02

The Treasury announces in the 2001-02 Debt and Reserves Management Report, published today as part of the Budget 2001 process, that it plans to complete the programme of gold sales, announced in May 1999, during the coming financial year. It plans to sell 120 tonnes of gold from the UK reserves of gold and foreign currencies during 2001-02, through Bank of England auctions as in previous years.

There will be six auctions during 2001-02, starting in May 2001, each of 20 tonnes. These will continue to be conducted on a single, uniform-price basis. The Bank of England has today issued a revised Information Memorandum setting out the detailed terms and conditions of the auctions.

The announcement follows a detailed review of the gold sales programme by the Treasury and the Bank of England. The recommendations of the recent National Audit Office report on the gold sales, which found that the Treasury had met its objective to sell in a fair and transparent manner while achieving value for money, were considered in particular. The joint review also took into account the views of interested parties canvassed by the Bank of England.

NOTES FOR EDITORS

1. The Treasury announced on 7 May 1999 the intention to restructure UK gold and foreign currency reserve holdings to achieve a better balance in the portfolio, by increasing the proportion held in currency (Treasury press release 77/99). It was announced that the Treasury would sell 125 tonnes of gold in the remainder of 1999-2000, through a programme of five auctions. On 3 March 2000 (Treasury press release 30/00), the intention to sell 150 tonnes of gold during 2000-01 in a programme of six auctions was announced.

2. Five auctions have so far been held in 2000/01. Each auction has been of approximately 25 tonnes of gold. The sixth auction in 2000-2001 will be held on 14 March. The terms and conditions of those auctions are set out in an Information Memorandum issued by the Bank of England on 3 March 2000.

3. Today's announcement of the programme for gold sales in 2001-02 was made to Parliament in answer to a Written Question from Barbara Follett (Stevenage).

4. In September 1999, 15 European central banks announced that their sales would not exceed 2000 tonnes over the following five years. As before, the UK sales for 2001-02 are consistent with that announcement.

5. Media enquiries should be addressed to Charles Keseru in the Treasury press office on 020 7270 5188.