FOUR PER CENT. BANK RATE.

Taranaki Daily News, 31 May 1922, Page 2

FOUR PER CENT. BANK RATE.

BETTER OUTLOOK FOR TRADE AND PRICES. London, April 15. The bank rate has been reduced to 4 per cent, from the 4£ per cent., at which it had remained since February 16 last. This is, therefore, the second cut this year, and synchronises with the increased volume of trade recorded in the Board of Trade returns for March and financial conditions which had previously largely adjusted themselves’ to a. prospective fall. Without, therefore, inclining too much on the side of optimism, it may be truthfully said that the present position gives rise to considerably greater confidence in the future. The fall in the official rate for money means lighter burdens for the trader and gradually cheapening goods to the consumer. It means, moreover, that money lying idle at the bank will be earning less, for the big banks have already announced that the interest allowed lor money on deposit will in future be i per cent, less at 2 per cent. This is a matter affecting the stock markets, because it will lead to further investment demand. But it also frees money for trade and commerce, and though a thorough-going revival in industry is not yet assured, the fact that money is available, as well as being on a cheap basis, is an encouraging factor. The Westminster Gazette says: “We have not had so low a bank rate as 4 per cent, since July, 1914.”