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.

There is not the remotest possibility that rates will get back to 10% or higher in the current tightening cycle. The financial markets believe they will peak at 4.75% next year after further action by the Bank to bear down on inflation.

Even so, the speed at which rates have risen and the dawning realisation among borrowers that there will be no return to the emergency levels reached during the Covid-19 pandemic is bound to have an impact on an already weak economy. Interest rates were at rock bottom levels for well over a decade following the financial crisis of 2007-08 and an entire generation has grown up believing that ultra-cheap borrowing is the norm. What’s more, many people have bought houses at high loan-to-income ratios in the belief that mortgage rates will be permanently low.