Interest Rates
Tutor2u Economics
April 2008
Monetary Policy - Base Rate of Interest for the UK
Percent
Percentage, since May 1997 base rates have been set by the Bank of England
8.0
8.0
7.5
7.5
7.0
7.0
6.5
6.5
6.0
6.0
5.5
5.5
5.0
5.0
4.5
4.5
4.0
4.0
3.5
3.5
3.0
3.0
97
98
99
00
01
02
03
04
05
06
07
08
Source: Reuters EcoWin
Trying to Stem the Credit Crunch
Percentage, since May 1997 base rates have been set by the Bank of England
7.0
Percent
6.5
7.0
6.5
London Interbank 3-Month Interest Rate
6.0
6.0
5.5
5.5
5.0
5.0
4.5
4.5
4.0
4.0
Bank of England Base Rate
3.5
3.5
3.0
3.0
00
01
02
03
04
05
06
07
08
Source: Reuters EcoWin
The Price of Unsecured Credit
Per cent, source: Bank of England
18.0
18.0
17.5
17.5
17.0
17.0
Credit cards
16.5
16.5
Percent
16.0
16.0
15.5
15.5
Overdrafts
15.0
15.0
14.5
14.5
14.0
14.0
Personal loans
13.5
13.5
13.0
13.0
Jan
Mar May
Jul
05
Sep
Nov
Jan
Mar May
Jul
06
Sep
Nov
Jan
Mar May
Jul Sep Nov
07
08
Source: Reuters EcoWin
UK Mortgage Lending Interest Rates
Percent
Interest rates charged by Building Societies
5.7
5.7
5.6
5.6
5.5
5.5
5.4
5.4
5.3
5.3
5.2
5.2
5.1
5.1
5.0
5.0
4.9
4.9
4.8
4.8
4.7
4.7
4.6
4.6
4.5
4.5
Jan
Apr
Jul
03
Oct
Jan
Apr
Jul
04
Oct
Jan
Apr
Jul
05
Oct
Jan
Apr
Jul
06
Oct
Jan
Apr
Jul Oct
07
Source: Reuters EcoWin
The Cost of Fixed Rate Mortgages
Per cent, Source: Bank of England
7.00
7.00
6.75
6.75
6.50
6.50
2 year fixed rate mortgages
Percent
6.25
6.25
6.00
6.00
5.75
5.75
5.50
5.50
5.25
5.25
5.00
5.00
5 year fixed rate mortgages
4.75
4.75
4.50
4.50
Jul
Oct
03
Jan
Apr
Jul
04
Oct
Jan
Apr
Jul
05
Oct
Jan
Apr
Jul
06
Oct
Jan
Apr
Jul Oct Jan
07
08
Source: Reuters EcoWin
Interest Rates for the UK and the USA
Per Cent
8.0
8.0
Bank of England Rates
Percent
7.0
7.0
USA Interest Rates
6.0
6.0
5.0
5.0
4.0
4.0
3.0
3.0
2.0
2.0
1.0
1.0
0.0
0.0
97
98
99
00
01
02
03
04
05
06
07
08
Source: Reuters EcoWin
Interest Rates on 10-year UK Government Bonds
Percent
per cent
14
14
13
13
12
12
11
11
10
10
9
9
8
8
7
7
6
6
5
5
4
4
3
3
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07 08
Source: Reuters EcoWin