CITY AND SUBURBAN
Critical times, but what can the Chanceilor say to Key and Trev?
CHRISTOPHER FILDES
The hotels of Peking are block-booked for next November. Everyone wanted to go to the British Trade Fair, which the Prince of Wales was to open. Now Sir Geoffrey Howe, with his reassuring com- mand of understatement, says it is unthink- able that the Prince will be there unless things change — and as for the British traders, those there now have been check- ing their routes to the airport. We have at least been reminded what a crisis is. The dollar, this time, is seen as the place of safety. More surprisingly, the gold price has been slow to react. London bullion dealers say that the shrewd Chinese had stocked up ready — big Far Eastern buyers have been squirrelling gold away for a long time now. As for sterling, its difficulties are back in proportion. It is not far from where it was a year ago, but then it was coming and now it is going. . . . Barings describe it as a market at the mercy of Key and Trev. I think that these must be foreign exchange traders, shirt-sleeved, loud-mouthed, such as Barings would never allow into Bishops- gate, where the pound would be safe in the well-bred hands of Rollo and Hugo. If Key and Trev are minded to take pot-shots at sterling they have some ammunition still to come — the inflation figure at the end of this week, and the import side of the next trade figures. Bankers can see their cus- tomers anticipating a dock strike, and borrowing to finance extra stocks — get- ting in timber, for instance, to last them for months ahead. I think that this masks an unintended build-up of stocks, which has been going on all this year. Look beyond the strike, and you can see a clear-out of stocks, with companies cutting both orders and prices, repaying borrowings, and even finding themselves in no hurry to meet pay claims. The Chancellor may have some difficulty getting such ideas into Key's and Trey's heads. He has, though, a number of opportunities just now, from this week's economic debate to next week's Treasury committee, where he is making another of his charactetistic, guest appearances. Perhaps he will tell them, as I rather airily suggested a fortnight ago, that worse things happen at sea. And not only at sea.
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