Summary When faced with the prospect of rising interest rates, some have dismissed the potential pain it will cause by arguing that rates were much higher in the 80s and 90s. This week’s chart compares the impact on living standards that high mortgage rates had on homeowners in the late 80s to the present day, […]
The base rate climbed steadily to 5.5% in 2008 before the global financial crash, after which it plummeted to 1.5% within one year as the Bank attempted to stimulate investment and consumption.
UK interest rates remain at the historic “emergency” low of 0.5% set by the MPC in March 2009, and financial markets have consistently overestimated the likelihood of a rate rise since then.
Last week, the Economic Research Council hosted our fifth annual economic forecasting event, the “Clash of the Titans”, where we invited three economic experts to give their forecasts for 2016.
Tomorrow’s Bank of England Monetary Policy Committee meeting marks the sixth anniversary of their decision to reduce the Bank Rate to an “emergency” record low of 0.5%.