FOAB Information

Friday 29 December 2023

Today Is...UK Pays Off It's American Loan

By the end of World War II Britain had amassed a debt of £21 billion and was looking around for a loan and went to America and said we saved the World from Hitler so how about you throw us a few bob.
John Maynard Keynes was sent to the United States and Canada to obtain funds with the expectation that in view of the United Kingdom's contribution to the war effort, especially for the lives lost before the United States entered the fight in 1941, America would offer favorable terms and America went okay, heres £3.75 billion business loan (worth £61 billion in today's money) and you can pay it back in 50 annual payments at 2% interest starting in 1950.
Some officials in the British Government opposed it as it came with conditions which required radical changes to UK commercial arrangements but Britain was in no position to refuse so reluctantly agreed to it.
The last payment was made today in 2006 for the sum of £45.5m and was actually six years late and the the total amount repaid, including interest, was £3.8bn.

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