CITY AND SUBURBAN
West End, East End the Ken and Eddie show is keeping to the script
CHRISTOPHER FILDES
It scarcely took the published minutes to inform us that Kenneth Clarke's instinct is to get interest rates down, while Eddie George at the Bank of England would rather keep them up. Writers of financial fiction, like Mr George's deputy, would have no trouble telling the story. The Chancellor wants a persistent recovery, the Governor wants persistent low inflation, and just now both of them are getting their way. It is true that consumers now seem to have noticed that Mr Clarke meant what he said about raising taxes. Pinchpenny shop- pers will keep the price war in the High Street going, and maintain pressure on the suppliers, who are longing to get their prices up. There ought still to be scope for another cut in interest rates, continuing the slow shift away from a too-tight monetary and a too-tight fiscal policy — the previous Chancellor's double whammy. With that must go a shift from domestic markets towards export markets, and Europe's may at long last have stopped getting worse. We still have to see whether the lowered esti- mates for public spending, so airily con- jured up in the last minutes of the Budget speech, are just financial sleight of hand or whether the Treasury's axe will draw blood. A Chancellor in a shaky government now more than halfway towards an unwelcome election is poorly placed to stop his col- leagues writing cheques on the bank of promises. For that matter, he would be well placed to bring on an old-fashioned recov- ery, with house prices and shop prices bub- bling away — but he hasn't, so far, and so good.
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