Bank Rate was raised from 4% to 5% on the 27th February. The increase did not stem from any considerable change in the United Kingdom's domestic or external situation. Some rise was thought desirable to help moderate the growth of demand at home, which otherwise seemed likely to lead to increases in costs and prices that would jeopardise the long-term growth of the economy and cause difficulties in the external field. Furthermore, Bank Rate at 5% would provide more room for short-term money rates to rise, especially were comparable rates abroad to move higher. An increase of 1% was of conventional amount, and seemed the minimum change required to achieve the objectives in view and avoid the creation of further uncertainties.
Published on
01 June 1964
Commentary