Who owns UK debt?

A frequently asked question is – Who does the UK borrow from? Who owns the UK debt?

  • Firstly,  government debt is different from the external debt of a country (total owed by private and government sector to foreign debtors)
  • It is also different to the balance of trade (concerned with the level of UK imports and exports)

The government needs to borrow because it spends more than it receives in tax revenue. To finance this shortfall the government (in the UK through an intermediary such as the Debt Management Office) sell bonds, gilts and treasury bills.

These are bought by private sector institutions such as pension funds, investment trusts and banks. The majority of these private sector buyers are domestic financial institutions. Most UK debt is owned by the UK private sector. From 2009-12, the Bank of England has pursued a policy of Quantitative easing which involves buying gilts from the private sector. Therefore, there has been a growth in the % of UK gilts held by the Bank of England.

About 30% of UK national debt is held by oversees investors.

Trends in ownership of UK debt

percent-gilt-holdings

Since 2009, the Bank of England has purchased gilts. During this period, the % of gilts held by UK insurance and pension funds has fallen.

On 15th September, 2012 The Bank of England has bought £356bn worth of UK gilts.

Overseas holdings have stayed fairly constant at 30%. Helped by the Euro-crisis making UK debt more attractive than countries in the Eurozone.

UK Public sector net debt was £1,032.4 billion  at the end of July 2012, equivalent to 65.7% of GDP

Holdings of gilts by sector

(How to find) Selecting ‘United Kingdom Economic Accounts, Q2 2012 (Pdf 845Kb)’ , see page 182, Table X16, (government securities F.33211), explains NBMX NBTF NBZN NCMD NCYT NERD NEXL NGCZ from. PSF Finance stats at HM Treasury

UPDATE 2013

As of October, 2013, the quantity of gilt holdings by the Bank of England has risen to  risen to £374,991 mn or £374 billion. (HM Treasury)

Note: MFIs – monetary financial intermediaries – banks and other financial institutions which are involved in deposits and lending.

holdings-gilts-sector

PSF Finance stats at HM Treasury

Graph Showing UK Debt Held By Overseas Investors

oversees holding of UK gilts
Source: UK DMO

 

Who owns US National Debt?

As of March 4, 2009, the total U.S. federal debt was $10,942,165,294,650.89 (just under $11 trillion) You can find latest figure here at US Treasury Direct

The biggest foreign holders of US debt are:

  • China – $727 bn
  • Japan – $629 bn
  • UK – $157 bn
  • Brazil – $129bn
  • Russia – $116bn

Total foreign debt holdings = $3,000bn or about 28% of total national debt.

Note: in 2001, foreign debt holdings were $1,051 bn or 17% of total holding

debt

Source: debt statistics at US treasury

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6 thoughts on “Who owns UK debt?

  1. you didn’t answer the main question – which countries own UK national debt? Like in the breakdown you provided for US national debt

    Thanks

  2. Same point as Yuri. I’m interested in the breakdown of UK gilts owned by non-UK interests. It appears that this data isn’t publically available. Why? Any ideas?

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