It is now exactly a year since the Bank of England started raising interest rates from a record low of 0.1%. Threadneedle Street has increased the cost of borrowing at each of its nine meetings since December 2021 and after the latest 0.5 point jump it now stands at 3.5%.
By historic standards that seems nothing to get worked up about. In the period between 1997 – when the Bank was granted its independence – and the start of the financial crisis a decade later interest rates never dropped below 5%. In the 1970s, 80s and early 90s, official borrowing rates were often well into double digits.
