Quizzes & Puzzles12 mins ago
who does the government borrow off?
12 Answers
it was on the news that government borrowing is going up to 50 bn plus!! they lend to the banks...but who lends them the money?
Answers
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Printing more money is what Mugabe which is what gives you massive inflation.
The main way the Government borrows money is by issuing bonds called Gilts
http://www.moneyextra.com/guides/gilts-bonds-0 11691.php
In the current climate where banks are not trusted gilts are attractive because they're backed by the Government not by a bank that could crash.
So what's actually happening is because the banks can't borrow money the Government is borrowing the money and lending it to the banks.
In return for doing this they (we the taxpayer) get a cut from the banks in stock and other benefits.
Whether the tax payer wins or loses depends on how much they get back compared to how much risk turns out to be bad - which at the moment nobody knows.
We're all bankers now!
The main way the Government borrows money is by issuing bonds called Gilts
http://www.moneyextra.com/guides/gilts-bonds-0 11691.php
In the current climate where banks are not trusted gilts are attractive because they're backed by the Government not by a bank that could crash.
So what's actually happening is because the banks can't borrow money the Government is borrowing the money and lending it to the banks.
In return for doing this they (we the taxpayer) get a cut from the banks in stock and other benefits.
Whether the tax payer wins or loses depends on how much they get back compared to how much risk turns out to be bad - which at the moment nobody knows.
We're all bankers now!
But the lon debt ultimately has to be paid back - or at least the interest on it has to be paid.
In the last financial (fiscal) year, 6% of government spending went to service the national debt. This will increase as the debt increases - quite sharply given this extra �60bn or so.
This means either less money will be made available, or floating around for other things such as doctors and teachers etc, or more inevitably, tax increases will be required to fund the gap.
In the last financial (fiscal) year, 6% of government spending went to service the national debt. This will increase as the debt increases - quite sharply given this extra �60bn or so.
This means either less money will be made available, or floating around for other things such as doctors and teachers etc, or more inevitably, tax increases will be required to fund the gap.
Well not necessarilly.
The interest on what the government borrows on behalf of the banks will be paid by the banks.
It's a bit like there's a big sign over downing street:
"Want to lend money but have been refused credit? Ring loans are Gov and ask for Gordon"
"We'll consolidate your outstanding mortgages into one easy to pay fee and all we ask is shares, your bonus payments and to have vote Gorden tatooed on your forehead"
The interest on what the government borrows on behalf of the banks will be paid by the banks.
It's a bit like there's a big sign over downing street:
"Want to lend money but have been refused credit? Ring loans are Gov and ask for Gordon"
"We'll consolidate your outstanding mortgages into one easy to pay fee and all we ask is shares, your bonus payments and to have vote Gorden tatooed on your forehead"
I think you might be confused waterboatman
The World Bank makes loans to developing countries to help reduce poverty and create infrastructure.
The UK is actually the 4th largest shareholder in the World Bank.
We will be contributing over �2 billion over the next 3 years to it
http://www.dfid.gov.uk/aboutdfid/dfidwork/wban dimf.asp
The World Bank makes loans to developing countries to help reduce poverty and create infrastructure.
The UK is actually the 4th largest shareholder in the World Bank.
We will be contributing over �2 billion over the next 3 years to it
http://www.dfid.gov.uk/aboutdfid/dfidwork/wban dimf.asp
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