Just like you and me, if the Government wants to spend more money than it has in the bank, it has to borrow it.
As with consumer borrowing, money isn’t lent for nothing and the Government has to pay interest on its debts.
The state has long been spending more money than it receives in taxes and has racked up an IOU to the tune of £1,000billion, a whopping two-thirds of Gross Domestic Product.
Internationally, Britain is within the top 10 of biggest debt-laden countries, though it’s the United States and Japan that top the list.
Government debt is owned by us, the taxpayers. This means every UK citizen now owes approximately £16,000, costing £2,000 in annual interest.
But who lends all this money to the Government in the first place? Watch this video to find out.