OREANDA-NEWS. March 18, 2015. Britain will increase sales of government bonds in the coming fiscal year, despite improving public finances, in part to refinance an increased number of gilts that are due to mature, a Reuters poll showed on Tuesday.

The mid-range forecast from a poll of 17 primary dealers over the past week is for the Debt Management Office to issue 147 billion pounds (\\$216.5 billion) in the year starting in April, more than the 125.9 billion pounds to be sold this fiscal year.

A day ahead of his annual budget, finance minister George Osborne looks on track to meet his borrowing target for the 2014/15 fiscal year.

A rise in gilt redemptions and a smaller contribution to government coffers from the government's retail investment arm, National Savings and Investments, were the main drivers behind the increased issuance outlook.

But poll respondents were clear that the underlying trend is one of improvement for British government finances, despite the higher issuance.

The poll also showed the DMO will retain a similar, evenly balanced split between sales of short-, medium-, long-dated and inflation-linked bonds.

"While we expect the DMO broadly to maintain the remit structure, we anticipate modest increase in linker supply at the expense of shorts," RBC analysts Sam Hill and Vatsala Datta said in a note to clients.

Most other strategists shared this view. Assuming gilts sold via mini-tender followed the pattern of other sales, strategists on average expected sales of gilts with a 3-7 year maturity to fall to just under 25 percent of total sales from 25.4 percent this year.

All other categories would gain in share, with the biggest increase for 7-15 year and index-linked gilts.