The main points in the latest period are:
- The combined current account deficit of the major seven OEeD countries widened further in the fourth quarter of 1985; but for the year as a whole the deficit was $10 billion less than in 1984, with a further increase in the US deficit more than offset by increases in the German and Japanese surpluses.
- The current account position of the non-oil developing countries deteriorated steadily throughout the year and the deficit for 1985 as a whole was more than double the total for the previous year.
- There was a continuing high level of activity in the fixed-rate bond market in the three months to February, but issues of floating-rate notes declined owing to unfavourable market conditions: announced syndicated credits, after declining steadily throughout 1985, recovered in January and February to the highest level for over a year.
- In the foreign exchange markets, the re-adjustment of the major currencies initiated by the G5 meeting in September continued, with the dollar falling back by a further 11% against the deutschemark and 10,1/2% against the yen in the three months to end-February. Sterling was adversely affected by the sharp fall in oil prices, and fell by 10% in effective terms over the period.