The first quarter of 1963 was a period of bitter weather, flagging output, and high unemployment; and it saw the breakdown of the Brussels negotiations and sharp, if short-lived, attacks upon sterling. The succeeding quarters of 1963 have been in strong contrast: the economy has expanded, unemployment has fallen, and sterling has been in good demand. For interest rates and the supply of credit, the year does not fall into such divisions. Medium and long-term yields rose in the first quarter, fell back rather more in the second, and then did not change much until the end of October, when they rose again; yields at the end of November were slightly higher than at the beginning of January. Short-term money rates have remained broadly stable during the whole of 1963; Bank Rate in particular has stayed at 4% since the 3rd January, when it was reduced from 4½%. The supply of bank credit has increased almost throughout the year, and there have been some relaxations in the minimum liquidity ratios applying to the London clearing banks.
This Commentary relates largely to developments since the middle of the year.
Published on
01 December 1963
Commentary