CITY AND SUBURBAN
One-bound Nigel struggles to get free from the market's toils
CHRISTOPHER FILDES
Fat bounder is the Opposition's latest term of abuse for Nigel Lawson — an expression which will be widely deplored as blatant girthism. His opponents ought to take example from Alfred Harmsworth, explaining to his readers why Albert Ed- ward Prince of Wales was called Turn-tum: `His Royal Highness is so called by a few close intimates on account of the pleasing rotundity of his person.' As for bounding — resilience, surely, is among his best qualities. At one bound he can be freer than Jack. A year ago he seemed trapped by low sterling and high spending. A month ago some thought him trapped in an overheated economy. Ten days ago he seemed trapped under a rockfall of British Petroleum shares. This week he seemed trapped, like the rest of us, by the markets. He was particularly buoyant and ingenious in his autumn statement. Memo from Lawson to Washington: How can you raise spending, cut taxes, and reduce your de- ficit? Answer: when you no longer need so much money to service your debt. The markets, of course, cannot wait for that, and this week the friendless dollar is drag- ging them down again. Mr Lawson has done his best, buying the equivalent of $6 billion for the reserves, but such props can no longer hold the dollar up. It needs as quickly as possible to be at a level at which it can be defended by every instrument of policy, including a sharply increased dif- ferential between US interest rates and everybody else's. Mr Lawson would surely have given us 'the other half off base rates before now if he did not need it in reserve as a negotiating card. The Germans and the Japanese have been dealt similar hands, however clumsily they are playing them. This is the game that matters. Mr Lawson must be impatient to get back to the card-table. If he can bound out of this one, even the girthists should fall silent.
Previous page
