In discussing the world economy, the Governor makes the following points:
- Countries have not only generally adjusted better to the second large rise in oil prices than to the first. Even more encouraging, they are saving in the use both of energy in general, and oil in particular.
- The banks and the international financial institutions both have key roles in the recycling process. It is important that official lending should continue to be accompanied by appropriate programmes for economic adjustment.
- European success in combating inflation depends heavily on corresponding success in the United States. High US interest rates, arising from a tight anti-inflationary policy, have created awkward policy dilemmas for some other European countries by putting pressure on their interest rates and exchange rates. In these circumstances, some resort by them to exchange market intervention is understandable.
- It is in our interest that the United States follow firm policies in both the monetary and fiscal fields, even if they are not those most immediately comfortable for us to live with.