Agenda item

Report of the Chamberlain

The Board received a report of the Chamberlain providing a summary of the City of London Corporation’s treasury management portfolio (investments) as at 31 October 2021. The Chamberlain introduced the report and drew Members’ attention to the key points. The Board noted that capital financing requirements were likely to change as the City of London Corporation moved through the Medium-Term Financial Plan.

The Chamberlain advised that the key metric used for measuring interest rate risk on bond funds was duration, with a 1% increase in interest rates generally approximated as equalling a 3% decrease in value. However, as the Corporation treats these investments as longer-term holdings, it should expect such losses to be offset by improved yields over its investment horizon of around three years. In response to a question from a Member, the Chamberlain advised that there were two tranches of Crossrail funding outstanding for City’s Cash, which were still currently invested and would be paid on completion.

A Member queried whether the recent increase in inflation had impacted officers’ views in respect of Treasury Management Strategy. The Chamberlain responded that officers intended to review all conditions and circumstances under the next Treasury Management Strategy for 2022/23 to assess whether any measures were required to mitigate the impact of inflation on the value of short-term investment balances.

RESOLVED – That the report be noted.