Britain to pay back all WWI debts

[LONDON] Britain is to pay back all of its World War I debts, worth some £1.9 billion (US$3 billion), through a refinancing deal involving the issue of new bonds, finance minister George Osborne said Wednesday.

It will also repay bonds dating as far back as the 18th century when a massive speculative crash known as the South Sea Bubble occurred in 1720, leaving behind significant national debts.

The government will capitalise on current very low interest rates to refinance the debts.

"This is a moment for Britain to be proud of," Mr Osborne said.

"We can, at last, pay off the debts Britain incurred to fight the First World War.

"It is a sign of our fiscal credibility and it's a good deal for this generation of taxpayers. It's also another fitting way to remember that extraordinary sacrifice of the past."

Officials estimate that Britain has paid some £5.5 billion in interest on its World War I debts since 1917.

More than 120,000 people have War Loan gilts, making it the most widely held British government bond. They are all to be contacted soon to receive payment of the paper.

Mr Osborne announced in October that the government would pay back £218 million of bonds but Wednesday's announcement goes significantly further.

AFP