Havering Council has exceeded its investment benchmark for 2024/25, delivering a yield of 5.26% against a benchmark of 3-month SONIA (sterling overnight interest average rate) at 4.82%, a margin of +0.44%, despite ongoing inflationary pressures. The news was presented at the Havering Council Audit Committee meeting on Tuesday, 8 July 2025, as part of the Treasury Management Annual Review Report 2024-25. As of March 31, 2025, Havering Council's total investments were £117 million.
Kathy Freeman, Strategic Director of Resources and S151 Officer, presented the report, highlighting that the Authority's long-term debt remained fixed at an average rate of 3.70%. The report also noted that new one-year Public Works Loan Board (PWLB) loans totaling £293 million were secured between December 2024 and March 2025 at an average rate of 4.55%. These loans were used to refinance maturing debt of £118 million and finance historic capital spending.
The Bank of England (BoE) Monetary Policy Committee (MPC) began easing monetary policy during the year, cutting the Bank Rate in steps of 0.25% from 5.25% in April 2024 to 4.50% by the end of the financial year. UK inflation, as measured by the Consumer Prices Index (CPI), remained range-bound, starting at 2.3%, reaching a low of 1.7% in September 2024, and ending the year at 2.6%, slightly above the BoE's target rate of 2%.
The committee noted that the Authority's debt portfolio as of 31 March 2025, is fixed at an average rate of 3.70% with an average duration of 12.6 years. The possibility of debt rescheduling was regularly discussed with the council's treasury advisor, MUFG corporate markets, but current PWLB rules on redemption remain prohibitive and costly.
The Authority holds a £7 million Lender Option, Borrower Option (LOBO) loan with Danske Bank at a rate of 3.6%. Danske Bank has the option to propose an increase in the interest rate at set dates, while the Authority then has the option to either accept the new rate or to repay the loan at no additional cost.
During 2024/25, the Authority's treasury activities remained within the treasury limits and prudential indicators set out in the Treasury Management Strategy Statement (TMSS).
