25 APRIL 1998, Page 28

Up the hill, quick march

WHEN Mr George was a junior subaltern, his seniors would rush out and march inter- est rates to the top of the hill. The idea was to show that, from there, rates could only march down — thus helping the general staff in their uphill struggle to sell British government stock. That is no longer Mr George's worry, but he still needs to con- vince the markets that the next move in interest rates will be downwards. Like that he can hope to take the steam out of ster- ling, which seems to be what he wants, and is what the Chancellor wants. The quick way to do that is to march rates up and rel- ish the view from the top. Forward, Duke.