Trade, money, houses
I THINK that the May trade figures told us the truth, but not all of it. They are right to say that the position is worsening, but wrong to imply that our exports are crumb- ling. It is not as if our big exporters are working short, time or laying off staff. ICI, for instance, is running its bulk chemical plants flat out, hopes soon to get prices up — and meanwhile is buying in from its international competitors so as to meet its orders. That looks like a fair snapshot of what is going on. The figures afforded another stick to beat the money markets. It has been evident for weeks now that any stick will do. A fourth successive increase in bank base rates leaves ten per cent squarely in the sights, and the building societies can now get ready to take down the posters which say how cheap their mortgages are. It is now an object of policy (though I do not expect ministers to make triumphant speeches saying so) to blow the froth off the house market, and this could be the very moment when the bubbles begin to deflate. The Budget, which put an end to tax relief for house improvements, also set a limit of 'one house, one tax relieved mortgage' — after a deadline in August. Estate agents say (well, they would say) that cohabiting couples have been rushing to buy and beat the deadline. That rush must be ending. I observe new flats on the Thames at Limehouse where the developer is offering prompt purchas- ers free Porsches. That has the ring of last year's City, last year's buyers, last year's car, last year's post-code. How long can they keep up this year's prices?
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