This is the most sentimental of all Gerry Rafferty's songs. It is about a man who dreams of owning a house and living away from his neighborhood, but he is a drunk, and cannot achieve that goal. He drinks to forget what he doesn't have, and never realizes he's a rolling stone with no direction.
Rafferty was a member of Stealers Wheel, who had a hit in 1973 with "Stuck In The Middle With You." His first band was a folk duo called "The Humblebums." His singing partner was the famous Scot comedian Billy Connelly.
Baker Street is a real street in London; Rafferty often stayed with a friend who lived there. The song was the Scottish singer's first release after the resolution of legal problems surrounding the acrimonious breakup of his band Stealers Wheel in 1975. In the intervening three years, Rafferty had been unable to release any material due to disputes about the band's remaining contractual recording obligations, and his friend's Baker Street flat was a convenient place to stay as he tried to extricate himself from his Stealers Wheel contracts. Rafferty explained to Martin Chilton at the Daily Telegraph: "Everybody was suing each other, so I spent a lot of time on the overnight train from Glasgow to London for meetings with lawyers. I knew a guy who lived in a little flat off Baker Street. We'd sit and chat or play guitar there through the night." In the last verse, Rafferty expresses his exhilaration as his legal and financial frustrations are finally resolved: When you wake up it's a new morning The sun is shining, it's a new morning You're going, you're going home
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