The History of Interest Rates

THE HISTORY OF INTEREST RATES SINCE 1997 rates have been decided by NINE members of the Bank's MONETARY POLICY COMMITTEE THIS COMMITTEE FEBRUARY MEETS ONCE A MONTH to set the bank rate RAISING THE BASE RATE BRINGS DOWN INFLATION BY ENCOURAGING SAVING THE TASK IS TO KEEP INFLATION BELOW 2% AND ABOVE 1% BY PROJECTING 2 YEARS AHEAD AND DETERRING PEOPLE FROM BORROWING when inflation looks likely to pick up INTEREST RATES WILL BE RAISED LOWERING RATES should stimulate economic growth PUSHING PRICES UP as consumers will have MORE DISPOSABLE INCOME EFFECTS OF RAISING INTEREST RATES INCREASED INCREASES THE COST of borrowing INCENTIVE to save rather MORTGAGE THAN SPEND INCREASES interest payments INCREASES REDUCED THE VALUE GOVERNMENT CONFIDENCE OF EXCHANGERATE DEBT INTEREST PAYMENTS INCREASE UENTS A TIMELINE OF KEY EVENTS 1694 Bank Of England founded and interest rate was set at 6% 1847 8% highest ever recorded & named 'Panic of 1847' 1857 RISES TO 10% 10% ш 1939-1945 1914 10% TER WVI BROKE OUT S2% 1973 remained at throughout WW2 13% highest ever recorded at the time. Named the SECONDARY BANKING CRISIS 198017% highest ever recorded FROM NOV 1979 TO 1ST JUNE 1980 MARCH 2009-PRESENT 0 5% LOWEST EVER RECORDED due to Worldwide recession AN INTERNATIONAL COMPARISONWW UK 0.5% | |||||||| ||||| 0.25% 4.5% 1% USA пшшш. TURKEY U.A.E T||||||||| ||||||| ||||||| SWEDEN 1% SPAIN 0.5% RUSSIA 8.25% || | ||| || |||| S.KOREA 2.5% SOUTH AFRICA 5% POLAND 2.5% N.ZEALAND 2.5% N MEXICO 4% INDIA 7.25% ITALY 0.5% JAPAN 0% GREECE 0.5% ШШНW FRANCE 0.5% Пш пшшшшш JAMAICA 5.75% ARGENTINA 11.4% BRAZIL 8.5% Pure Commercial Finance design by www.jessicadraws.com