Saturday, November 08, 2008
Interesting rate cut facts
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

Digging through the numbers following Thursday's unusually large rate cut from 4.5% to 3%, a few interesting things emerge:

Bank rate was cut to its lowest level since 1955, when Britain had just come off rationing and when three-quarters of the population was not born. It was the biggest single cut since 1981, when the Thatcher government was desperately trying to lift the economy out of its deepest recession in decades.

But there was another statistic which brought home how significant last week’s move was. There were only two occasions during the 20th century when the level of interest rates was slashed by a third. One was in August 1914, at the start of the Great War, the other was in September 1939, on the outbreak of the Second World War.

The last time Bank rate was cut from 4.5% to 3% in a single move, by the way, was in 1695.