FINANCIAL NOTES IIOUSIND AND BANK RATE.
That there may be a perfectly justifiable and intelligent divergence of opinion with regard to the merits or demerits of a 5 per cent. Bank Rate goes without saying. It has been reserved for Mr. Wheatley, however, to expose certain oppo- nents of the higher Bank Rate to ridicule by asserting that the rise of 1 per cent. in the Bank Rate actually involves some great addition to the annual rents of dwelling-houses and, further, by affirming that this 1 per cent. is equal approxi- mately to what would be placed on the new houses if all the workers in the building industry had demanded and had been granted a 50 per cent. increase in wages." The effect of a 1 per cent. rise in the Bank Rate on long loam connected with housing is, of course, on a par with that produced on any other long-dated investment. The higher Bank Rate may con- ceivably be of brief duration, but for the moment it means that the borrower may have to pay on a long-dated loan sonic quite fractionally higher rate of interest. To compare, how- ever, such fractional increase with what would be produced on the cost of building by all the workmen being paid 50 per cent. extra in wages is, of course, ridiculous. - *
Previous page
