BANK RATE AND CONFIDENCE
SIR,—There are no half-measures with confidence either it exists or it does not.
The 7 per cent. Bank rate as such did not restore foreign confidence in sterling. It was the leap of 2 per cent. and the other 'squeeze' measures super- imposed on a basically healthy current balance of payments that succeeded in convincing foreign holders of sterling that the pound was now (at last) less likely to depreciate. As sterling has fallen in value since 1947 at all annual rate of nearly 5 per cent. some decisive action was necessary to convince foreign opinion that our post-war inflation was to end. Mr. Nicholas Davenport, by reducing his criticism of the measures of last autumn to a quibble over a difference in Bank rate of only 1 per .cent., is surely admitting the success of these measures.--Yours faith fully,
R. J. FAS I ON 42 Highclig Drive, Leigh-on-Sea, Essex
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