Borrowing

[siddlem]

When the Chancellor announces that he is going to borrow x amount of money in his budgets, where exactly does he borrow the money from ??....Thanks Mark

[buildersmate]

In very crude terms, taxes coming in to Gordon should equal Government expenditure. Otherwise, big problem - certainly tomorrow if not today. A budget deficit means more Government spending planned than money expected to be raised by taxes - hence Gordon 'borrows' money. He either borrows it from himself by getting the Bank of England to print more of it (bad idea) or takes out a loan from the World Bank, or sells Gilts, government securities.

[Loosehead]

They also make use of the money in National savings accounts and premium bonds etc.