Merton Council's Cabinet has reviewed its treasury management activities for the 2025/26 financial year, noting a reduction in borrowing and a healthy investment income.
The council maintained an under-borrowed position throughout the period, with borrowing standing at £38 million at the end of March 2026, a decrease of £4 million from the previous year. This reduction was partly due to the early redemption of a LOBO loan, which is expected to generate annual savings.
Investment income for the year reached £9.8 million against a budgeted figure of £8.9 million. The council's treasury management activities were confirmed to be in compliance with all relevant principles, prudential indicators, and investment limits.
In its treasury management strategy, Merton Council aims to strike an appropriate balance between securing lower interest costs and achieving cost certainty, while minimising the risk of incurring losses from defaults and the risk of receiving unsuitably low investment income. The council's borrowing decisions are not predicated on any one outcome for interest rates, and based on cash balances and the capital programme, no new borrowing is planned until 2028/29 or later.