Darling to back Sharia bonds

Britain could become the first western country to issue Islamic bonds in line with Sharia law to raise money for public spending programmes.

In next month’s Budget, the Chancellor Alistair Darling is expected to back the bonds, which would attract investment from the Middle East. A consultation exercise is already underway on the issue, launched in November, ends on Thursday.Islamic law forbids making money from interest, making conventional loans unacceptable to the devout. Specially-designed bonds have been created to comply with the demands of Sharia, and are estimated to be worth £5.5bn in a £125bn global Islamic financial market.

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