Towards the end of last year and early in 1977 there was a marked change of mood in UK financial markets. The completion of negotiations with the International Monetary Fund, the arrangement of a facility relating to the official sterling balances, and a $1% billion loan raised through a syndicate of foreign banks, all contributed towards an improvement in confidence. The mood of confidence was reflected most clearly in the course of the exchange rate which rose from a low point of $1.56 in October to above $1.70 in late December, and remained close to this rate throughout the following two months - when the authorities were also buying dollars on a large scale.
Published on
01 March 1977
Economic commentary