CITY AND SUBURBAN
Cash is king, the squeeze is on and John Major is a Norland Nanny
CHRISTOPHER FILDES
This is it. The squeeze is on. Companies are caught in the vice, and it is tightening on all of us. The lever is cash. Coloroll tells the story — the home-furnishings company whose shares this week halved in a morn- ing. For John Major, it answers the ques- tion which has sat on the top of his in-tray for the three months since he found himself hauled back to the Treasury to take over. He is a believer in the Norland Nanny school of economic management — none of this lax au-pair girl approach for him: 'If It isn't hurting', he says, `it isn't working'. It is hurting all right, and will hurt more. There has been, and continues to be, evidence either way. Those who suspect that the treatment still isn't hurting can point to the new surge of bank loans recorded in December, to the retail sales figures which argued at least that we had given ourselves one final Christmas binge, to the cash in the tills and our pockets M0, Nigel Lawson's favourite monetary indicator, still bubbling up. These are the numbers which have prompted the money markets to ask whether 15 per cent base rates will, after all, be enough.
Previous page
