The UK is bidding to become a global hub for Islamic finance with plans to launch the first Islamic bond provided by a western country.

The £200m bond, or sukuk, has been in the planning stages for years and the government hopes that it will encourage Islamic investment into all sorts of British enterprises. There are also plans for a new Islamic index at the London Stock Exchange so that investors can track companies that engage in Islamic-compliant activities.

Islamic finance is still a relatively new sector but it is growing fast and is now estimated to be worth $1tn globally. Providers say that Islamic finance, which promotes itself as more ethical and transparent than the mainstream, is an area that should be of interest to both Muslims and non-Muslims alike.

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