BANK RATE RISE

Press, Volume CVI, Issue 31113, 16 July 1966, Page 18

BANK RATE RISE

Market Reacts To Deposits (N.Z.P.A. -Reuter—Copyright! LONDON, July 14. Bank Rate speculation culminated today in the longexpected increase from 6 per cent to 7 per cent, but totally unexpected was the doubling of special deposits that accompanied it. The higher bank rate had already been adequately discounted, but the market was dazed for a spell by the news that the banks have got to find £loom a month, and put up half that sum in less than a week. Set The Pace Eventually it was concluded that selling of “shorts” would be inevitable, and this section set the pace as quotations were reduced by amounts ranging to Is 4d. But little stock came out today, and most falls had been reduced by the close. So the outcome for the week, after the stream of small sellers on earlier days, is that quotes at the “short” end are sometimes as much as half a point down. Even steeper are those in many of the later maturities, sometimes extending to about li points. Commonwealth loans have given way in the wake of gilts.