UK chancellor George Osborne last autumn announced plans for Britain to be the first European country to issue sukuk, as part of London’s strategy to become the “western centre for Islamic finance”.
But since then, Luxembourg and South Africa have hastened their plans to issue Islamic bonds, as they compete to attract investment from the Muslim world, according to the Financial Times.
Hong Kong entered the race in March, when local lawmakers passed a bill allowing the Hong Kong Monetary Authority to issue sukuk this year.
Baroness Sayeeda Warsi, a Foreign Office minister, said the UK was focused on making sure its inaugural Islamic bond issuance was right, but conceded the government was “aware of the competition”.
Another person close to the process said the UK could issue the bond in a matter of months but declined to give a date.