Britain: A Belt Tightener

Gathering for their regular Thursday morning meeting, directors of the Bank of England last week made a decision that has been expected on Threadneedle Street as well as Wall Street. Faced with a continuing economic crisis and with a shaky pound sterling that slipped at one point to its lowest value in 20 months, the directors raised the bank rate—the interest that other banks must pay to borrow from Britain's central bank. The rate was increased from 6% to 7%, a level it last reached during the sterling crisis of November 1964. Thus Britain became the sixth European nation...

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