In 1752, the
Chancellor of the Exchequer and
Prime Minister Sir
Henry Pelham converted all outstanding issues of redeemable government stock into one bond, Consolidated 3% Annuities, in order to reduce the
coupon (interest rate) paid on the government debt. In 1757, the annual interest rate on the stock was reduced to 3%, leaving the stock as consolidated 3% annuities. The coupon rate remained at 3% until 1888. In 1888, the Chancellor of the Exchequer,
George Joachim Goschen, converted the consolidated 3% annuities, along with reduced 3% annuities (issued in 1752) and new 3% annuities (1855), into a new bond, 2% consolidated stock, under the National Debt (Conversion) Act 1888 (
Goschen's Conversion). Under the Act, the interest rate of the stock was reduced to 2% in 1903, and the stock given a first redemption date of 5 April 1923, after which point the stock could be redeemed at
par value by
Act of Parliament. In 1927, Chancellor
Winston Churchill issued a new government stock, 4% consols, as a partial refinancing of the
National War Bonds issued in 1917 during
World War I.
Timeline of 2.5% consolidated stock Final redemption On 31 October 2014, the UK Government announced that it would redeem the 4% consols in full in early 2015. It did so on 1 February 2015, and redeemed the 3% and 3% bonds between March and May of that year. The final 2% and 2% bonds were redeemed on 5 July 2015. Section 124 of the
Finance Act 2015 made the legal provisions for the ending of the consol. ==References to British consols in literature==