In 1997, the Labour Government of Tony Blair had inherited a PSNCR of approximately £5 billion per annum, but by sticking to the parsimonious spending plans of the outgoing Conservative Government, this was gradually turned into a modest budget surplus.The national debt continued to increase, despite sustained economic growth, increasing to 37% of GDP in 2007.The origins of the British national debt can be found during the reign of William III, who engaged a syndicate of City traders and merchants to offer for sale an issue of government debt.
Both France and the United States of America also lost their AAA credit status in 2012.
Standard & Poor's had hitherto maintained the UK's AAA status.
This was described as a "humiliating blow" by Shadow Chancellor Ed Balls.
Chancellor George Osborne said that it was "a stark reminder of the debt problems facing our country", adding that "we will go on delivering the plan that has cut the deficit by a quarter".
Total government revenue in the fiscal year 2015/16 was projected to be £673 billion, whereas total expenditure was estimated at £742 billion. This represented a rate of borrowing of a little over £1.3 billion per week.
The British Government finances its debt by issuing Gilts, or Government securities.
After the war, the national debt once again slowly fell as a proportion of GDP.
In 1976, the British Government led by James Callaghan faced a Sterling crisis during which the value of the pound tumbled and the government found it difficult to raise sufficient funds to maintain its spending commitments.
Like other sovereign debt, the British national debt is rated by various ratings agencies.
On 23 February 2013, it was reported that Moody's had downgraded UK debt from Aaa to Aa1, the first time since 1978 that the country has not had an AAA credit rating.
The latter will continue to rise even if the deficit shrinks.