FINANCIAL NOTES
BANK RATE PROSPECTS.
IN dealing with the effect of the European Pact upon the financial situation I have already referred to the large exports of gold and the uncertainty which exists as to whether they will assume sufficiently large proportions to occasion a rise in the Bank Rate. Undoubtedly that movement will be avoided if possible for the sake of industry, but on the other hand, any prolonged drain of the metal would necessarily call for a 5 per cent. rate, if only to avert the possibility of a still higher rate being imposed if the check were not applied in good time. Inasmuch, therefore, as it is undoubtedly desirable, if possible, to prevent unduly high Bank Rates, I find that the best opinion in the City is undoubtedly in favour of retaining tbe present embargo on foreign loans for another few weeks until the Foreign Exchange and gold situation has become a little clearer.
* * * *
Previous page
