Last week we held a lunch at our London offices to mark the
eighth anniversary of Deloitte's UK CFO Survey. The Bank of
England's Chief Economist, Andy Haldane, gave the guest
address.
The CFO Survey started in the third quarter of 2007. That
quarter also saw a run on the UK building society Northern Rock and
UBS declare $3.4 billion of losses on US sub-prime mortgages. As
such, the third quarter of 2007 has a good claim to mark the
beginning of the global financial crisis.
In his remarks Andy highlighted how different the world was
then. The UK FTSE100 equity index stood at 6700 and UK base rates
were 5.75%. Today, eight and a half years later, the FTSE100 is
6,200, or 7% lower, and interest rates are 0.5%. Andy showed us a
remarkable chart using data he had put together from various
sources plotting interest rates since 3000BC. The chart
demonstrated that rates in the UK and the rest of the rich world
are the lowest in the last 5000 years.
