The UK is to pay back its War Loan in full as part of a package of refinancing announcements.

In a pre-Autumn Statement announcement this morning, the Treasury said it will redeem the 3.5 per cen War Loan in March next year as it repays the nation’s entire First World War debt.

The current perpetual bond was first issued in 1932, replacing the initial 5 per cent 1917 War Loan as part of a move to reduce costs relating to the national debt.

Today’s move follows the government’s 31 October decision to redeem the smaller, £218m 4 per cent Consolidated Loan, which it said was the first repayment of an undated gilt of this kind for 67 years.

The government will also explore options to redeem the remaining six perpetual gilts, some of which date back to the 18th century, when it deems it “value for money to do so”.

The debt will be refinanced at the lower rates of interest currently available: benchmark 10-year gilts are currently yielding just under 2 per cent.

By Dan Jones