World Economy

UK Repays Churchill Bonds

UK Repays Churchill BondsUK Repays Churchill Bonds

Britain on Friday said it was paying back bonds issued by then finance minister Winston Churchill to cover debts from World War I, as well as the Napoleonic and Crimean campaigns, BBC reported.

The “4% Consolidated Loan” bonds came out in 1927, partly to refinance National War Bonds originating from WWI that were widely touted as a patriotic investment during the war years.

They also paid for debt dating back as far as the South Sea Bubble financial crisis in the 18th century when a British joint stock company trading with South America collapsed.

The finance ministry said on Friday it was redeeming £218 million ($349 million) of the bonds.

“This will be the first time that a Chancellor has redeemed an undated gilt (sovereign bonds) of this sort in more than 60 years,” the ministry said in a statement.

Finance Minister George Osborne said: “We are only able to take this action today thanks to the difficult decisions that this government has taken to get a grip on public finances”.

The ministry said £2.0 billion in World War I debt is still outstanding -- “one graphic illustration of the legacy of this war on our nation and the long term effects of high debt.”

The government said it was planning to repay that debt in full.