An Ever-Changing Market: The Journey of UK Interest Rates

In the UK interest rate market, we have been fortunate over the past three years. However, we have now entered a phase of high inflation, which has consequently led to higher interest rates.

What have we witnessed?

If we take a long-term view over the last 50 years at interest rates, we can observe that the market has consistently changed. Factors such as shifts in government, financial crashes, global pandemics, and general cost-of-living crises have all impacted interest rates, either pushing them up or bringing them down.

During the Thatcher government, interest rates reached a staggering 17%, a significant increase from 5.5% in 1977. By the end of 1978, rates had risen to 12.5%, gradually climbing to 17% by 1979. From then on, rates slowly and steadily decreased with some natural fluctuations until 2007. The average interest rate from 1971 to 2023 was 7.11%, with the highest rates at 17.99% and a record low of 0.10% in March 2020.