This Commentary is mainly concerned with the three months February to April. Very heavy tax payments and, continued official sales of gilt-edged stocks caused exceptional monetary pressures during the first half of this period; but the pressures were eased by unprecedentedly large inflows of funds from abroad. Short-term interest rates in international markets, which had been very high throughout the second half of last year, moved downwards until mid April, when they started to rise again, In the United Kingdom, Bank rate was twice reduced by ½%, to 7%, Meanwhile, the prospective impact of large wage and salary increases upon industrial costs and prices caused increasing concern, and contributed to a sharp fall in the prices of both fixed interest stocks and equities in the second half of April; but sterling remained steady at that time.
Published on 01 June 1970
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