A timeline of key events and data relating to historical interest rates in the UK, 1979-2017.
Historical antecedents
Interest rates were very stable in the UK during the 18th century, staying put at between 4 and 5 per cent. Moving into the 19th century, there was more volatility, with interest rates shifting between 4 and 10 per cent. The first half of the 20th century was a similar picture, with rates fluctuating between 5 and 10 per cent.
The 1979 Conservative government
The incoming administration of Margaret Thatcher raised interest rates to 17 per cent, as this was seen by the government of the time as a key weapon in combating inflation. 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.
Black Wednesday September 1992
The UK’s withdrawal from the European Exchange Rate Mechanism on 16 September 1992 meant a rise in the base interest rate from 10 per cent to 12 per cent at 10.30am on that day; later that day there was a promise from John Major’s government to raise the rate further to 15 per cent. These actions were taken to encourage speculators to buy sterling. When this failed to materialise, the government reduced interest rates on 17 September 1992 back to the original rate of 10 per cent.
May 1997
The election of Tony Blair’s administration was accompanied by the new chancellor Gordon Brown handing control of the setting of the base interest rate to an independent Bank of England.
2003-2007
Interest rates were raised significantly in this period as an attempt to reign in what was perceived to be an over-inflating economy. Rates rose from 3.5 per cent in July 2003 to 5.75 per cent in July 2007.
2007-2017
Under the impact of the global financial crisis, the base interest rate fell to its lowest level for 300 years. Starting at 5.75 per cent in July 2007, rates had fallen to 0.5 per cent by March 2009, with a further fall to 0.25 per cent in August 2016. There was a very slight rise back to 0.5 per cent in November 2017.
2016 – 2017
August 2018 saw the BoE haul the base rate up to 0.75 per cent (the first time it had ever stood at this number). The members of the Monetary Policy Committee agreed unanimously to do so, indicating to some that the decision was long overdue.
2017 – 2020
In March 2020, the BoE dropped rates back down to 0.25% as part of the battle against Covid-19. This was followed just a week later by another decrease to 0.10%, an historic low.
2021 – now
As Covid-19 loosened its hold on the globe it was replaced by more issues – first, persistent inflation caused by a worldwide supply chain crunch and loose monetary policy and second, the Russian invasion of Ukraine, compounding these problems.
Consequently, the BoE pushed the rate up to 0.25% in December 2021, to 0.50% in February 2022 and then to 0.75% – the highest it has been since the summer of 2018, in March 2022.
Bank of England base rate 1979-2017
| Bank rate at year end (%)* | |
| 1979 | 17 |
| 1980 | 14 |
| 1981 | 14.375 |
| 1982 | 10 |
| 1983 | 9.0625 |
| 1984 | 9.5 |
| 1985 | 11.375 |
| 1986 | 10.875 |
| 1987 | 8.375 |
| 1988 | 12.875 |
| 1989 | 14.875 |
| 1990 | 13.875 |
| 1991 | 10.375 |
| 1992 | 6.875 |
| 1993 | 5.375 |
| 1994 | 6.125 |
| 1995 | 6.375 |
| 1996 | 5.9375 |
| 1997 | 7.25 |
| 1998 | 6.25 |
| 1999 | 5.5 |
| 2000 | 6 |
| 2001 | 4 |
| 2002 | 4 |
| 2003 | 3.75 |
| 2004 | 4.75 |
| 2005 | 4.5 |
| 2006 | 5 |
| 2007 | 5.5 |
| 2008 | 2 |
| 2009 | 0.5 |
| 2010 | 0.5 |
| 2011 | 0.5 |
| 2012 | 0.5 |
| 2013 | 0.5 |
| 2014 | 0.5 |
| 2015 | 0.5 |
| 2016 | 0.25 |
| 2017 | 0.5 |
| 2018 | 0.75 |
| 2020 | 0.25 |
| 2020 | 0.10 |
| 2021 | 0.25 |
| 2022 | 0.5 |
| 2022 | 0.75 |
Source: Bank of England Official Bank Rate History
Further reading on interest rate predictions for the early 2020s
