We all know that the total amount of debt owed by the British Government has ballooned in recent years – from £220bn in 1995 to almost £1.4 trillion today. But who actually owns the debt? In other words, who does Britain owe most of its money to? The answer is in the chart above. It shows you who owns UK government bonds (gilts) – everyone from UK households to overseas investors to (most notably) the Bank of England. Click on it for a bigger version.
As you can see, the Bank of England has gone from owning no government debt at all to owning a full 28% of the entire stock – thanks to its radical Quantitative Easing programme, under which it has created money and used it to buy government bonds. The biggest chunk of all is owned by overseas investors, who own a full 30% of the UK’s debt. That includes central banks and other investors.
There are one or two other striking facts. What I find slightly alarming is the fall in the holdings of UK households of Government debt. A decade ago they owned around £40bn of UK government bonds. Today the comparable figure is a mere £6.8bn.
All the figures are from the Debt Management Office.