On this day, 27 October 1986: Big Bang hits the Square Mile, and changes the City forever. Eliot Wilson takes us through the financial revolution

By the autumn of 1986, Margaret Thatcher had been in power for seven-and-a-half years, thanks to two successive general election victories. Her tenure had already beaten every Prime Minister of the century except Asquith, Churchill and Wilson. For more than three years, her Chancellor of the Exchequer had been the clever, forceful, no-fools-suffered Nigel Lawson, and his Budget of March 1986 had trumpeted reform and “popular capitalism”.

There was no sense that the Thatcher revolution was complete, however. The Prime Minister, always conscious of her provincial, lower middle-class roots, had a passionate hatred for vested interests and privilege. Even in the mid-80s, one striking example of these was the London Stock Exchange (LSE).

For a century after the Royal Exchange had first opened in 1571, stockbrokers had not been allowed within its precincts because they were regarded as too noisy and vulgar. Instead they had taken their business to coffee houses, especially Jonathon’s Coffee-House on nearby Exchange Alley. Such attitudes died hard. Women and foreign-born traders were only admitted to the Stock Exchange’s trading floor in 1973; and it was indicative that the chairman of the LSE from 1976 to 1986 was Sir Nicholas Goodison (Marlborough; classics at King’s College, Cambridge), who collected 18th century clocks and came from a stockbroking family.

The LSE was old-fashioned and fading. The world’s largest market was the New York Stock Exchange, and London was only a sixth of its size. The........

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