CITY AND SUBURBAN
Rumour, revolution, chilled gulls' eggs and the only game in town
CHRISTOPHER FILDES
The new game in City markets is to start the rumour that the Chancellor has resigned. It has gone round twice in successive weeks, and to judge by its timing, is started by dealers coming back from a good lunch and hoping to catch those who have lunched better and later. It is meant to generate business, which is scarcer these days, which is why the City has got back into the habit of having lunch. It is greeted by the Treasury with a well-judged groan of boredom. The more boredom the Treasury can generate just now, the better it will be pleased. It eases the path through Parliament of a long and revolutionary Finance Bill, which is now going down as smoothly as a well-chilled gull's egg. The last comparable Budget was Denis Healey's first — the 'irreversible shift' — and that had to be fought line by line, against an Opposition as happy to play the ball as the man. The Chief Secretary of the day, in his memoirs, singled out for blame a newly-elected Conservative who had proved particularly difficult, Nigel Lawson. Today, affability itself, he can watch the aggression deflect itself to other ministers and their measures. They forgot, and he remembered, Gil- more's Law, which told him that the time to take from A what you give to B is when you have something up your sleeve to give A. The excitement, such as it is, attaches to sterling and its embarrassing popularity. That is better than embarrassing unpopu- larity, and the exchange rate, which over the years has proved as good an economic indicator as any, must in part be telling us that the world is re-rating this country and its currency. It is also — and hence the embarrassment — telling us that sterling is the only game in town. The dollar was last year's game, the yen the Japanese have stitched up, the mark is dull, the- French franc is the flip-side of the mark, and now that even the Canadian dollar, so lately nicknamed the northern peso, has had its rally, sterling is getting its turn. What will stop it? The trade and payments figures? They are rightly dismissed now as gibber- ish, but some sort of a deficit is going on underneath them and widening, and de- ficits, in the end, move exchange rates. We may not have to wait for the end. If the players in sterling push their luck too far and overstretch themselves, they may find themselves walking into a well-set trap in the markets. Boredom can go only so far.
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