Finance Public and Private
Bank Rate
So much that is unnecessarily alarming, and, indeed, it might be said so much that is absurd, has been written with regard to the recent rise in the Bank of England rate of discount that it may be useful, perhaps, in a journal such as the Spectator, which goes to every section of the community, to endeavour to show exactly what is involved in the rise in the Bank Rate, why it has taken place, and how it is likely to affect the outlook whether for trade, investors, or the more speculative markets. And first, with regard to the actual facts. The Bank Rate, which for about twenty-two months had remained at 4i per cent., was advanced on Thursday in last week to 5/ per cent. Its effect was to occasion a fairly severe fall in all securities both here and in the New York Stock Markets, and the outburst of criticism of the action of the Bank Directors can, in the main, be attributed to the fact that the advance having been unexpected in a good many quarters, and especially in speculative quarters, the fall in values hit speculators on both sides of the Atlantic fairly hard; although, as is usually the case in such in- stances, those who have suffered have preferred to avow that it was either the interests of the investor or the trade of the country with which they were 'chiefly concerned.
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