This paper discusses the possible consequences for Scotland of the present policy of high interest rates are of more than academic interest. The sequence of eleven successive increases in the clearing banks' base rate between 2 June 1988 and 5 October 1989 which raised interest rates from 7.5 per cent to 15 per cent is one of the most remarkable in British financial history.

The paper considers the possible consequences for Scotland of the present policy of high interest rates, highlighting the importance of a stable base rate for achieving economic growth and stability.

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Interest rates and the regional experience

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