Despite extensive discussion with the industry, a UK sovereign sukuk is unlikely this year. The government is struggling to overcome tax-related problems and unwilling to issue in uncertain markets.
Earlier this month, the Treasury published the results of its consultation paper on a sovereign issuance of shariah-compliant debt. But legal reaction has been mixed.
"Some in the industry think that the government may be dragging its feet on this," said Mohaimin Chowdhury, head of legal, shariah and compliance at European Islamic Investment Bank. "They've raised legitimate issues but...