Bloomberg computer failure cancels debt issue

Government officials have been forced to postpone a debt issue, after a computer failure at the City information firm Bloomberg.

The UK's Debt Management Office (DMO) was due to auction a series of short-term Treasury bills, in an attempt to raise £3bn.

However, Bloomberg's trading terminals in London went down for more than two hours - at a critical moment.

In a highly unusual move, the DMO said it was having to postpone the issue.

It said any bids already tendered would not be valid.

The problem was taken so seriously in the City that even the Bank of England issued a statement, saying it "retains all the tools it needs to carry out its responsibilities for financial stability, and provision of market liquidity, if and as required".

Bloomberg said in a statement: "Service has been fully restored. We experienced a combination of hardware and software failures in the network, which caused an excessive volume of network traffic.

"This led to customer disconnections as a result of the machines being overwhelmed. We discovered the root cause quickly, isolated the faulty hardware, and restarted the software.

"We are reviewing our multiple redundant systems, which failed to prevent this disruption."

Most trading desks have Reuters terminals as well, so would not have been seriously affected. However, Bloomberg - the world's largest financial information firm - has an edge over its rival in the bond markets.