City and Suburban
Markets' Waterloo
The sterling markets — money, govern- ment stock, the exchange rate — drift damply about, like clouds looking for a suitable mountain. Oh for some nice jagged worry, to let them get the rain out of their system! The money supply? No, in the event, not jagged, or not for those prepared to avert their gaze from the largest supply of all, in the tills of the building societies. The summit, then? All parted with fair words on interest rates, even if Donald Regan, Secretary of the United States Treasury, reached his conclusion by a pro- cess of thought which Nigel Lawson described as simple-minded. Certainly Mr Regan has reached it before. 'I wish he wouldn't,' groaned a gilt-edged dealer, last time round. 'He's always saying that, and every time he does we lose a fortune.' Next for the worry list is our own Government's borrowing. The figures for May come out on Monday next, Waterloo Day. Mr Lawson has warned us that he expects to borrow a lot more in the first half of this financial year than in the second, and on Monday we may see what he means. Tim Congdon, upon whom has descended Nicholas Daven- port's mantle as the sage of brokers Messel, has been doing his sums, and calculates that in May the central government needed to borrow anything up to £2,500 million. For the public sector's borrowing requirement, add in the nationalised industries — can May have been a good month for the Coal Board's cash flow, or the railways' (carry- ing less coal), or the electricity generators' (burning oil)? Add in, too, the local authorities, tempted to keep up their spen- ding to show how much they need the money. That could take public sector bor- rowing up to £2,750 million in May, making £5,000-odd million for the first two months of the financial year. it is supposed to tot up to £7,200 million for the year as a whole. As for the markets, no wonder they resemble — in the phrase of pilots flying towards mountains — stuffed clouds.
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