Chancellor of the Exchequer, George Osborne said:
"This is a moment for Britain to be proud of. We can, at last, pay off the debts Britain incurred to fight the First World War."
Er no George you are re financing the debt not paying it off. 
However staggering it is that the Government has debts from hundreds of years ago that have never been paid off, it's comforting to know that at least this lot have the sense to refinance these ancient debts at lower rates. 
I think....
Politicians never miss an opportunity to spin. Gilts are rising at the moment due to any port in a storm with what is happening in the world. Settling 3.5% for 1% or less is a sensible move. George Osborne has also been lucky, with his borrowing at very low rates from ever rising debts, from not meeting his deficit reduction targets, so money spent on interest will be lower than forecast £56bn against £64bn iirc. The Euro is weakening where the Advocate-general has just ruled that ECB QE is compatible with EU law with a few no-no's then expect this instant creation of money to be used to stave off deflation, due to weakening commodity prices and the ECB screwups over the last 3 years, like a German inspired interest rate rise in the middle of a depression in 2011! Germany might huff and puff a bit but Merkel has made a career of taking the path of least political resistance, so the ECB will get their way. I'm not a fan of QE, but short term, done sensibly, it is probably the right thing to help stop Eurozone stagnation and worse.
The USD will continue to rise on the back of lowering commodity prices that benefit consumer nations and the US robust economic growth as a result. The losers are "gas stations with a country bolted to them", especially developing nations that have had US QE loose money chasing the better returns in these countries. Fed tapering made life difficult for India, Indonesia and Brazil last year, expect much more pain in these developing and other countries, especially Russia and to a lessor extent Ukraine where they have major economic problems and especially in Russia industry have borrowed in USD as interest rates were much lower that their local currency and now they have got much higher amounts to pay back and to service the debts, due to depreciating local currencies. If the companies are trading in local currencies and paying debts in USD, ouch, this is going to hurt!
Onshoring of money back to the US in 2015, may well cause a global financial crisis this year.
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Topic: Government debt and interest rates (Read 1156 times)