THE BANK RATE

Manawatu Standard, Volume XLIX, Issue 256, 27 September 1929, Page 7

THE BANK RATE

INCREASED ONE PER CENT.

EFFLUX OF GOLD. UNCERTAINTY CLEARED UP. (United Press Association —By Electric Telegraph—Copyright.) (British Official Wireless.) Received September 27, 11.30 a.m. RUGBY, Sept. 26. An increase in the bank rate by one per cent to 6J per cent was announced to-dav after the usual weekly meeting of the Court of Directors of the Bank of England. The discount rate had remained at 5i per cent since February 7 of this year, when it was raised to that figure from 4J per cent. The last occasion on which a 6| per cent bank rate prevailed was in April of 1921. The increase is attributed to the continued efflux of gold. Yesterday a further large amount of approximately £1,000,000 was withdrawn from the Bank of England, partly for snipment to America and partly for export to the Continent, bringing the total for the week up to nearly £3,500,000, and reduoing the total stock of gold in the bank to £133,000,000. The withdrawals of gold have been exceptionally large during the year. On the whole, the City of London has welcomed the rise in the bank rate. It has definitely cleared up the uncertainty of tho past few weeks, which has had a more clogging effect on the stock markets than dear money is likely to have. There was a general marking down of prices on the Stock Exchange after tho rise was announced, but there was no pronounced selling. 'The exchange position has been quick to respond to the higher bank rate. The pound sterling as expressed in American dollars has risen, and both the French and German exchanges have moved sharply in of London. EFFECT ON STOCK EXCHANGE. ttO SERIOUS DECLINE. (Australian Press Association.) Received September 27, 10.50 a.m. LONDON, Sept. 26. The .increase in the bank rate did not cause any serious decline on the Stock Exchange, as most brokers anticipated. There was, however, a slight weakening in gilt-edged securities, and some industrial stocks, though rubber shares remained steady, despite the raw commodity declining a farthing. RISE IN SCANDINAVIAN RATES. (Australian Press Association —United Service.) Received September 27, 10.59 a m. LONDON, Sept. 26. The Scandinavian bank rates have been raised, following the London announcement —the Danish and Swedish to 5£ and the Norwegian to 6 per cent.