Lashed to the anchor
I HOPE it is now clear to that nice Dr 1345111's admirers here that he is running the German currency to suit the Germans. His fan club tends to miss that point. Thirsty for the full pleasures of EMS membership, they would happily see British monetary policy made in Frankfurt. How much better, they say, the Bundesbank does it! Better for its own constituency, but not always much help to ours. Not much help in the autumn, forcing our base rates up to
15 per cent, and no help now — as the German bond market looks for higher rates in response to the inflation coming in from the East, and as the Bank of England glances nervously over its shoulder, fearing that all this might be too much for sterling. That is trouble that the Bank could do without — as the evidence multiplies that a year and a half of interest rates rising from 12 to 15 per cent has come to exert a ferocious cash squeeze. Mad to make it any tighter, but dangerous (so the Bank reas- serts) to let the pound slide.... With luck, we shall not have to choose, but the point is made: the central banker or Chancellor who hangs on to the deutschmark when things go wrong is the sailor who, when a storm blows up, lashes himself to the anchor.
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