Market Notes
By CUSTOS
Gilt-Edged
The news that several discount houses have been forced to borrow in a large way from the Bank of England at Bank rate caused a fright in the gilt-edged market, which began to worry again about a Bank rate change on Thursday. The authorities are clearly not intend- ing interest rates to fall in Great Britain while continental rates are still rising. (The German and Belgian bank rates have recently been raised :end German industrialists have now to borrow at 9 per cent.) The gilt-edged market has seen the greatest fall in turnover of any market on the Stock Exchange. It halved in May and has de- clined even further in June. The insurance com- panies put only £47.6 million of new money into government- stock last year against £88.2 million in 1964 and have invested even less this ear. The cause has been partly unhelpful taxation—the capital gains tax having killed gilt- edged switching by the insurance funds—and partly the unpromising monetary outlook abroad.
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