Final answer:
Britain was losing money in the colonies because colonists had taken to smuggling in response to the Navigation Acts.
Step-by-step explanation:
In addition to debt from war, Britain was losing money in the colonies because colonists had taken to smuggling in response to the Navigation Acts. The Navigation Acts were a series of laws that restricted colonial trade and required goods to be exported only to Britain. Colonists resorted to smuggling to bypass these restrictions, which resulted in a loss of revenue for Britain. This was a significant factor contributing to Britain's financial difficulties in the colonies.
Learn more about Britain's financial difficulties in the colonies