How Do Margaret Thatcher’s Monetary Policies Still Affect Us Today?

Given that Margaret Thatcher left office some 35 years ago, you could be forgiven for thinking that her economic and monetary policy decisions no longer affect either you or the broader UK economy.

However, there is evidence that some of the decisions Margaret Thatcher made during her time as the UK’s prime minister from 1979 to 1990 are still affecting some areas of our lives, even today in 2026.

More specifically, Margaret Thatcher’s policies around deregulation of the stock exchange, privatising public companies and even using the theory of monetarism to manage the economy are still having a ripple effect today. Let’s take a look at what each of these policies was and why it’s still relevant to those of us trading on financial markets now.

Deregulating the stock exchange

The day that the London Stock Exchange (LSE) became a private company, in effect deregulating the stock exchange is often referred to as the Big Bang This occurred in 1986 and it was the moment at which the LSE opened up to the rest of the world and to more traders.

Among the changes that still have a bearing on how financial markets operate today was the removal of fixed commissions on securities trading. This allowed more competition in the markets and ultimately paved the way for the kind of trading activity we see today.

One of the other significant shifts during the Big Bang in 1986 was the overnight move to electronic trading. This was huge. Until this point, trades had to be completed face-to-face. It’s why there are so many videos of trading floors that are full of life and very loud.

It’s hard to imagine having to execute all of your trades in person if you are involved in making trades today. But historically this was how it was done and the move to electronic trading really did change the world.

This is what has enabled us to build the business that we have and to help more people get access to prop funding Although technology has evolved considerably since the 1980s – the internet wasn’t even available back then – the concept of being able to make trades from anywhere in the world has been game changing and is still relevant today.

But this shift also made it much cheaper to execute trades, which opened up the idea of trading in shares and other financial instruments to more people. Prior to this period, it had been the preserve of investment bankers.

Finally, this period saw a significant influx of foreign companies into the LSE, which had previously been excluded. The volume of trades being made each week on the LSE increased considerably.

Privatising public companies

This was a side policy of Margaret Thatcher’s time in power, but it’s one that has had long ripple effects. When she came to office, the railways, telecoms companies, energy and utility organisations and water companies in the UK were state owned.

The idea behind privatisation was to improve efficiency by allowing such organisations to be run for profit. In the case of the telecoms industry, this has worked well. The increased number of players in the market has benefited consumers by lowering bills and we’ve seen significant infrastructure investment made by these private firms.

However, when it comes to the likes of the railways and water companies, privatisation has been less successful. What it did do back in the ‘80s though was open up share ownership to more people.

Indeed, many people who bought shares in previously state-owned businesses like BP and British Gas saw their share values increase substantially very quickly, building wealth. This highlighted how effective shares trading could be for building wealth and likely encouraged others to consider going down this route.

Monetarism theory

One of the driving forces behind Margaret Thatcher’s economic policy was the theory of monetarism This theory suggested that the supply of money in a country’s economy was one of the most important factors for controlling the direction of the economy.

In the UK, this approach to monetary policy was credited with bringing down inflation during the late 1970s and early 1980s, which meant people had more disposable income which they could spend or invest.

However, inflation also has an impact on the value of savings and periods of high inflation drive people to look for ways to maximise their returns rather than essentially watching their cash depreciate in value if it sits in a savings account.

When the percentage of inflation in an economy exceeds the interest rates being paid on cash savings, your money effectively becomes worth less every year. This is one of the reasons why more people are considering prop trading in the UK.

The UK government has set a target of 2 per cent inflation, although it is currently sitting at 3.6 per cent. This means that many people who haveits base rate over the last year.

A lower base rate is good news for borrowers but bad news for savers, who will see the amount of interest they earn on their funds reduce.

What can you do as a saver as rates fall?

If you’re seeing the value of your savings eroded by falling interest rates and higher levels of inflation, there are a few steps you can take. It’s important to note that these aren’t without risks to your capital, but the returns can be so significant many people decide they are worth it.

Getting involved in prop trading is an increasingly popular option, although there is a lot to learn in this area if you want to have a chance of doing well with your trades. That’s why we put together our trading programs, which are designed to help people with varying levels of expertise get started with prop trading.

If you have experience, for instance, our instant funding program will give you access to the markets and allow you to start trading in a live environment straight away – and enable you to make money from the get-go.

Should you be newer to prop trading, we also offer one-step and two-step accounts designed to help you become familiar with the different kinds of trades and learn how to read the market before you commit with a funded account. This gives you time to get comfortable so that once you start making real trades, you see results straight away.