FINANCE AND INVESTMENT
By CUSTOS
SOONER than most of us expected we are hack on a 2 per cent. Bank Rate, and the City is filled with whisperings of the coming loan-flotation. The Bank Rate move was, of course, overdue in the technical sense, open market rates in Lombard Street having already left the 3 per cent. official minimum high and dry. I still feel, however, that this rapid return to the pre-war bedrock level is Whitehall's rather than Threadneedle Street's doing. Obviously, the cheap- money school at the Treasury are well and truly in the saddle, and if interest rates are not successfully held down it will not be for any want of trying. For the moment gilt- edged stocks are hesitant, but that is not surprising after the recent almost perpendicular rise. Some of the short-term speculators are taking their profits, and potential buyers are restrained. Will the rise be resumed? I think it will, given anything like a reasonable chance, by which I mean that fresh support will develop unless there is some really adverse news from the war front. After all, the Treasury need not be in any hurry to launch its first loan operation, and it will be only according to plan if the market is now hotted up to ensure success for a loan on really economical terms.
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