The review describes developments in various markets, mainly in the period November to January.
The Bank's minimum lending rate (MLR) was raised to 17% on 15th November and was then unchanged for the rest of the period. There was considerable tightness in the money market in mid-January, caused principally by very heavy official sales of gilt-edged stocks and by seasonal tax payments. The Bank helped to moderate these excessive liquidity pressures by releasing special deposits and (in mid-February) by offering temporary facilities for the purchase of gilt-edged stocks from the clearing banks, for resale in March.
On the foreign exchange markets, sterling recovered strongly from the fall which followed the lifting of exchange control restrictions in late October.
Published on
01 March 1980
Financial review