The review describes developments in various markets, mainly during the period May to July.
Until the announcement of a package comprising fiscal and monetary measures on 8th June, the markets were affected by uncertainties: action by the authorities was widely expected, and it was increasingly felt that a sustainable level had not been established for interest rates. The announcement of the measures brought an immediate response in the gilt-edged market and led to heavy sales of gilt-edged stocks by the authorities.
Sterling traded quietly, rising by almost 6% against the dollar but by only about 2% in terms of the effective exchange rate index. The review contains the usual sections on international banking and the euro-currency markets, oil money movements and the commodity markets. It concludes with a brief account of the draft legislation on deposit-taking institutions.
Published on
01 September 1978
Financial review