Two minute guide: how big is Britain's national debt - and should you worry?

Two minute guide: how big is Britain's national debt - and should you worry?

Britain owes a lot. In the future, it may be a lot more.

This is our stab at trying to explain everything in 120 seconds.

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How much does Britain owe?

The British government has, on your behalf, racked up debts of £1.76 trillion. Even in the age of big numbers, it's a big number.

How big?

The best gauge is to compare debt with the size of the total economy, as measured by "GDP". Britain's debt to GDP ratio was at 85% in March, according to the Office for National Statistics. We can compare that number with history (10 years ago it was below 50%) and with ratios for our rivals (recent Eurostat figures put the numbers at 96% for France, 68% for Germany and more than 130% for Italy).

Why so big?

Without wanting to sound glib, countries spent more than they earned. This was mainly due to the global financial crisis of 2008. Governments received far less tax receipts than they expected as their economies tanked. In the UK, the worst year of overspending was in 2010 when it was equivalent to 10% of GDP.

But I thought austerity measures were cutting the deficit?

Politicians like to bandy that around: "We're reducing the deficit!". But this only refers to the annual overspend. This has been coming down since the 10% peak in 2010 to around 2% today. But Britain is still borrowing at a rate of around £45bn a year. By 2020, it will still be borrowing £30bn a year, according to official forecasts. The Chancellor, Philip Hammond, reckons the UK might be able to stop borrowing by the mid-2020s.

Does it matter?

The government can still borrow money over 10 years on an interest rate below 1.5%. With debt so cheap some people believe it's better to borrow more, to boost demand in the economy and therefore get higher tax receipts in the future.

Others point to the fact that other countries have coped with debts far bigger than our own. Japan's debt to GDP ratio has been over the 200%-mark for a decade. But because it can keep borrowing cheaply, the debt problem has not (yet) come home to roost.

However, debt is debt. Some have argued it's a case of one generation taking from another.

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