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UK Interest Rate History

To be able to understand the UK interest rate history, you need a clear and concise timeline of the most critical events in history. Below, we have detailed for you the rise and fall of the UK interest rates over time, between 1979 - 2018. Following this, you'll find the information tabled for you to read quickly.

Current UK Interest Rate?

The current UK Interest rate is 0.75%.

Bank of England in London who set the UK interest rates

Historial UK Interest Rate Chart

source: tradingeconomics.com

source: tradingeconomics.com

Interest Rate History

During the 18th century, interest rates in the UK were stable, remaining at 4-5% regardless of the issue. The instability came about in the 19th century, where there was more volatility in the interest rates that saw it moving anywhere between 4 and 10%. The start of the 20th century was no different, with the same instability and constant flux between 5 and 10% instead.

The 1979 Conservative government

The incoming administration of Margaret Thatcher raised interest rates to 17 per cent, as the government of the time saw this as a critical weapon in combating inflation, which was steadily rising at the time. It did have the effect of reducing inflation, although critics noted its negative impact on UK manufacturing exports. Interest rates began to rise again towards the end of the 1980s, partly under the pressure of house price rises. Interest rates had gone from 17% in 1979 down to 9% in 1982, and were back to 14.88% in October 1989.

September 1992

Known as "Black Wednesday", the UK withdrew from the European Exchange Rate Mechanism on 16th September 1992. This meant that the Bank of England base rate interest sat at 12%, up from 10%. This was at 10.30am. John Major, the prime minister, promised to raise the rate even further to 15%. This was due to the encouragement of speculators to buy Sterling. This did not happen, with the government reducing interest rates back to 10%

Tony Blair

May 1997 shone a light on Labour's Tony Blair coming into administration, and Chancellor Gordon Brown accompanied him. Together, they handed control fo the setting of the base interest rate back to the independent Bank of England.

2003 - 2007

During these four years, the interest rates rose significantly to curb an over-inflating economy. In July 2003, the interest rates stood at 3.5%, up to 5.75% by July 2007.

2007 - 2018

The global financial crisis of 2008 has kept rates consistently under 6%, with the base rate falling to the lowest level of 300 years. They sat at the earlier mentioned 5.75% in July 2007 before falling dramatically to just 0.5% by March 2009. This fell again in August 2016 to 0.25%, which was a benefit to all homebuyers. The interest rate rose just slightly back to 0.5% by November 2017 and then increased again to 0.75% in August 2018.

New home buyers who have borrowed mortgages at a fixed-rate have enjoyed interest rates at remarkable and historic lows.

Bank of England in London home of the MPC who set UK interest rates