5000 Years of Interest Rate History
This consumer-approved tool helps demonstrate the context for today’s near historic low interest rates. It takes a view on rates dating back to 3000 BC, all the way through today. Not only does it track global interest rate trends, but it also shows how the US 10 Year Treasury, stacks up against the Bank of England Discount Rate, the German Bund, and the Japanese discount rate since 1840.
Covered in this piece:
3000 BC: Early Records indicate that interest rates were 33% per year for barley and 20% per year for silver during the Sumerian Period
1900 BC: The Code of Hammurabi recognized Sumerian rates and set them as legal maximums. The overall effect was lower average rates throughout the Babylonian empire.
300 BC: By the 3rd century BC, Greek financial systems were highly developed, and the use of credit was in common place. This expansion of credit systems further pressures interest rates. Rates at this period dropped further from the Babylonian period.
300 AD: Industry, trade and the Latin language decay as the fall of the Roman empire is well underway. Interest Rates surge as a result.
500 AD: During the Byzantine Empire, Justinian’s Code lowers legal maximum rates to 4-8%, based on the status of the creditor.
1694 AD: Bank of England begins lending at a 6% interest rate
Low interest rates create unique problems for retirees, download this sales tool to help demonstrate historical context and possible solutions with your clients.
SOURCES:
3000 BC – 1693 AD: Sidney Homer and Richard Sylla, A History of Interest Rates (Hoboken, New Jersey: John Wiley & Sons, Inc., 2005)
1694 AD – 2022 AD: Bank of England, Discount Rate: https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate