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A short history of public borrowing for wars

The FRED graph above shows public lending (positive values) and public borrowing (negative values) for the United Kingdom since the year 1700. The timeline includes large downward swings that are dominated by wars:

  • War of the Spanish Succession and Queen Anne’s War (1701-1714)
  • War of the Austrian Succession (1740-1748)
  • Seven Years’ War (1756-1763)
  • American Revolutionary War and associated wars (1775-1783)
  • Seven coalition wars, including the French Revolution and Napoleonic wars (1792-1815)
  • World War I (1914-1918)
  • World War II (1939-1945)

Of course, the United Kingdom fought many more wars, mostly in its colonies. But those seem to have been part of the normal course of operations, whereas the wars highlighted above have had a serious impact on government finances. Since World War II, the spikes in borrowing are not linked to wars, but to economic conditions, such as the stagflation of the 1970s and two recessions, and the corresponding fiscal policy responses. The COVID-19 pandemic is not yet included in these historical data.

How this graph was created: Search FRED for “public borrowing UK.”

Suggested by Christian Zimmermann.

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