What Is The UK Debt-To-GDP Ratio?
As of the end of 2020, the UK’s national debt-to-GDP ratio is 108%.
This data is reported by the International Monetary Fund (IMF). Between 2019 and 2020, the UK saw the biggest 1-year spike in debt-to-GDP since the 2008 financial crisis.
The IMF projects a 9% increase in the UK’s debt-to-GDP figure by 2025.
UK Debt Data From The Organisation for Economic Co-operation and Development (OECD)
On the other hand, another source, the OECD, reports the UK’s gross government debt as 117.3%, with a previous high of 119.8% in 2016.
As you can see in the chart above, the OECD data shows that the UK’s debt-to-GDP spike started 1 year before the 2008 financial crisis — the figure more than doubled from 53.1% in 2007 to 107.4% in 2012.
Is The GDP Responsible For The UK’s Rising Debt-To-GDP Ratio?
Looking at the UK’s GDP-per-capita figures from 1995 to 2019, the country only experienced a drop from 2008 to 2009 and has remained on an uptrend in all other years.
This means that the UK’s rising debt-to-GDP ratio is due to the country’s abundant spending and borrowing, which greatly outweighs earnings.
Who Manages The UK’s Government Debt?
The United Kingdom’s debt is managed by the UK Debt Management Office (DMO). The DMO was established in 1998. Prior to the DMO, wholesale sterling debt insurance was sold by the Bank Of England.
Legally speaking, the DMO is part of the HM Treasury (HMT).
What Government Securities Does The UK DMO Sell?
The DMO offers the following types of securities:
- UK Government Liability in Sterling (GILTs): two different types of bonds offered on the London Stock Exchange, conventional and index-linked GILTs.
- Treasury Bills: short-term debt obligation with maturity periods between 1 and 364-days.
What Other Services Does The UK Debt Management Office Offer?
The DMO also offers loans to local authorities through the Public Works Loan Commissioners scheme, which is a subsidiary government agency.
According to the DMO website, authorities who are eligible for PWLB loans are the likes of metropolitan, borough, county, city, and combined authorities.
In the fiscal year of 2019-2020, the DMO processed 1,094 new loans with a sum total of £10.4 billion.
Another scheme offered by the DMO is the National Loan Guarantee Scheme (NLGS), designed to aid smaller businesses with cheaper access to money.
The NLGS has offered more than 28,000 loans since the scheme’s launch in 2012.
How Much Money Did The UK Debt Management Office Raise In 2020?
According to the DMO’s annual performance report, the total of 43 GILT auctions raised £115.1 billion.
Of this sum, £20.4 billion was attributed to supplementary sales of three different types of long-term and two types of index-linked bonds.
Who Holds The UK’s National Debt?
According to a report assembled by the Jubilee Debt Campaign in November 2019, the UK’s national debt holdings are distributed as follows:
- More than 50% of the UK’s national debt is owed to private companies in the UK
- An estimated 19% of the UK’s national debt is owed to foreign holders
- The remaining debt of £435bn (as of 2019) is owed to the Bank Of England
Given the increase in unsecured personal debt in the UK, the volume of debt owed to private companies in the UK is expected.
Other Facts About The UK’s National Debt
What facts should you know about United Kingdom’s national debt?
- You could wrap $1 bills around the Earth 10,048 times with the debt amount.
- If you lay $1 bills on top of each other they would make a pile 281,887 km, or 175,157 miles high.
- That's equivalent to 0.73 trips to the Moon.
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You can learn more about the UK’s biggest import and exports in our economic overview of the country’s international trade.
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