Historical Interest Rates UK

Historical Interest Rates in UK

interest-rates-1800-2011Interest rates in the UK since 1800.

Bank Rate 1830–1972 and 2006–09, Minimum Lending Rate 1972–81, London clearing banks’ base rate 1981–97, repo rate 1997–2006.  End year observation.

Interest Rates in the Twentieth Century

interest rates 1900-2011

Interest Rates since 1945

interest-rates-1945-2011The highest period of interest rates was in the late 1970s, when the government were fighting high inflation caused by oil prices and rising wages.

Interest rates were also increased to 15% at the beginning of the 1990s when the UK was trying to keep the value of Pound fixed in the ERM and reduce inflation.

Historical Real Interest Rates

Inflation and Interest Rates 1945-2011

Inflation and Interest Rates since 1900

Interest rates and Inflation since 1979

Definition of Real interest Rate= Nominal interest rate – inflation.

e.g. if CPI inflation is currently 3.2% and Base rates are currently 0.5%. It means we have a negative real interest rate of – 2.7%

interest-rates

Recent Real Interest Rates

interest-rates

 

Inflation History

inflation

 Related

 

5 Responses to Historical Interest Rates UK

  1. The Credit Cruncher April 6, 2009 at 12:51 am #

    In theory, banks should not buy bad investments… the caution generated by the economic crisis and uncertainty about job security etc… means that not many of the ‘ordinary men on the street’ will be throwing their money around quite as much as they have been used to doing… whatever the statistics say about real or imagined interest or inflation rates.

  2. Below Market Value Properties July 23, 2009 at 3:07 pm #

    It’s definitely a time when you have to be especially interested in how your money and investments are working for you.

  3. ulrich September 19, 2012 at 2:57 pm #

    I believe that the real interest rate definition you are using is incorrect
    “Real interest Rate= Nominal interest rate – inflation”

    It is general agreed that it is instead Ri=[(1+Ni)/(1+P)]-1

    As a result the graph should show that in a low inflationary environment Ri is far less volatile than Ni the opposite is true in high inflationary environment

Trackbacks/Pingbacks

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    […] becomes too readily available, its price will drop. This will cause inflation. From the graph, “Inflation and Interest Rates” by ONS Bank of England it is clear that most of the time,  when interest rates are high, […]

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