DESCRIBING interest rates of the 1980s as an aberration, Mr James Leslie, of bond fund specialists Guinness Flight, said rates were unlikely to reach such peaks again for many years.
''Everyone under 45 thinks it is natural to have 10 per cent interest rates, but it is not, it is totally unnatural,'' he said.
According to Mr Leslie, the past 20 years have been an aberration in an 80-year period. Inflation has been abnormally high and interest rates have had to rise in an attempt to curb money supply growth.
''Until 1968, six per cent interest rates were considered high. We now think high to be 10, 11 or 12 per cent.'' He said the abnormal rise came about because of deficit spending for the Vietnam War and the oil crises of 1973 and 1979, all of which led to escalating inflation.
But with inflation having fallen to less than five per cent in many of the developed world's largest economies and interest rates having followed close behind, Mr Leslie believes there is no reason interest rates should reach the levels of the mid-1980s.
''Our view is that this time it is different,'' he said.