The UK government is set to become the first country outside the Islamic world to issue an Islamic bond, prime minister David Cameron is set to announce.
Due to speak at the ninth World Islamic Economic Forum, the first held outside a Muslim country, Mr Cameron will announce that the Treasury is working on issuing a bond-like Sukuk worth around £200m which could launch next year.
The London Stock Exchange will also create a new Islamic Market Index to help investors identify Islamic finance opportunities.
Mr Cameron is expected to day: “Already London is the biggest centre for Islamic finance outside the Islamic world. And today our ambition is to go further still.
“When Islamic finance is growing 50 per cent faster than traditional banking and when global Islamic investments are set to grow to £1,300bn by 2014 we want to make sure a big proportion of that new investment is made here in Britain.”
Regarding the Islamic bond, Mr Cameron will say: “For years people have been talking about creating an Islamic bond - or Sukuk - outside the Islamic world. But it’s just never quite happened.
“Changing that is a question of pragmatism and political will. And here in Britain we’ve got both. This government wants Britain to become the first Western sovereign to issue an Islamic bond... we very much welcome the involvement of industry in developing this initiative which we hope to launch as early as next year.”