Happy Birthday Bank of England – 328 years of bank rate in numbers
Kevin Brown, savings specialist at Scottish Friendly, comments:
Today is the Bank of England’s birthday – 328 years’ old - which is coincidentally the same as the number of times bank rates have been hiked over that period. Looking at historic data its clear we’re still well behind the average level of 5.9%. Of course, if you look at the average rate over the last 50 years its even higher at 8.9%.
With inflation running at its highest level in over 40 years, it is highly possible that we could see interest rates rise well above the current 1.5%. But the bank has so far been careful with its monetary policy for fear of tipping the economy into recession.
A return to such historic averages would potentially be good news for savers. But we’re unlikely to get there in the near future, making investing still potentially the most effective long-term way to grow your wealth over time.
Some fun facts on the Bank of England base rate :
Average base rate over 328 years – 5.9%
Average since 1972 (50 years) – 8.9%
818 policy rate moves over 328 years – 491 cuts and 328 hikes
Highest ever rate – 15 November 1979: 17%
Lowest ever rate – 11 March 2020: 0.25%
Single biggest hike – 4% hike to 8% on 31 July 1914 (WW1 Bank holiday financial crisis )
Single biggest cut – 6 August 1914: 4% cut to 6%, having risen from 3% on 30 July to 4% then 8% on 31 July and 10% on 1 August (WW1 Bank holiday financial crisis )
15 June 1871 – first 25 basis point rate move (down to 2.25%)