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How do UK base rates compare with the recent past?

As UK base rates head towards 0% (as many experts predict over the next few months) it is interesting to see how rates compare today with those over the last 10 years. A quick look at the graph shows that in 1997 rates jumped from just under 7% to approaching 8% before falling back to 5% in 1999. There was then a sustained period where rates remained at 6% as the government sought to control both inflation and growth in the UK economy.

It was not until 2001 that rates got anywhere near the current base rate figure, touching just over 3% between 2001 and 2003. As the economy started to increase in activity growth began to move out of control which saw rates moved up towards 5% in 2004 peaking at just under 6% in November 2007. We then saw the substantial fall in rates between November 2007 and today with rates now standing at a minimum 2%. So what can you expect in the future?

Many experts are forecasting that UK base rates will plummet towards 0% over the next few months in a desperate attempt to refloat the economy before a possible depression sets in.

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