Almost a hundred years after the end of World War I, Britain completed repaying its huge debts contracted during the first great world wars.
British Treasury paid the month about 1.9 billion pounds ($ 2.8 billion) to repurchase from a total of over 100,000 people "war bonds" issued in 1917 to finance its huge debts contracted by the UK in order to finance World War.
Originally issued with a coupon of 5% bonds were converted into bonds with a coupon of less than 3.5% in 1932, while public debt has become unsustainable. Debt Management Office estimated that total UK paid interest amounting to $ 5.5 billion in loan contracting in 1917.
"In 1914, the national debt stood at 650 million pounds, but at the end of the war was about seven billion pounds and was financed by issuing bonds," said director of M & G Investments, Jim Leaviss.
Due to the current low interest rates, the British government can pay its war debts by issuing new bonds under more favorable conditions.
Source: CNBC
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