<P> At the beginning of the 20th century the national debt had been gradually reduced to around 30 percent of GDP . However, during World War I the British Government was forced to borrow heavily in order to finance the war effort . The national debt increased from £ 650m in 1914 to £ 7.4 billion in 1919 . During World War II the Government was again forced to borrow heavily in order to finance war with the Axis powers . After the war the debt gradually decreased as a proportion of GDP, but in the 1970s, following a Sterling crisis, the British Government was forced to seek help from the International Monetary Fund (IMF). </P> <P> As the 1980s and 1990s progressed, the proportion of debt to GDP fluctuated up and down according to how the wider economy was performing, remaining relatively constant during the early 1980s recession, falling in the latter half of the decade, and rising again as the early 1990s recession reduced tax receipts . In the late 1990s and early 2000s the national debt again dropped in relative terms, falling to 29% of GDP by 2002 . After that it began to increase, despite sustained economic growth, as the Labour Government led by Tony Blair increased public expenditure . By 2007 the national debt had increased to 37% of GDP . The deficit continued to grow and, following the Great Recession beginning in early 2008, both government borrowing and the national debt have risen dramatically, reaching around 70% of GDP by the end of 2012 . </P> <P> 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 . This syndicate soon evolved into the Bank of England, eventually financing the wars of the Duke of Marlborough and later Imperial conquests . </P> <P> The establishment of the bank was devised by Charles Montagu, 1st Earl of Halifax, in 1694, to the plan which had been proposed by William Paterson three years before, but had not been acted upon . He proposed a loan of £ 1.2 m to the government; in return the subscribers would be incorporated as The Governor and Company of the Bank of England with long - term banking privileges including the issue of notes . The Royal Charter was granted on 27 July through the passage of the Tonnage Act 1694 . </P>

When was the revolutionary war debt paid off