Business: Indicator of the Week

A few weeks ago, bankers were cautiously predicting that their prime rate—the interest charge on loans to the most creditworthy corporations—would top out at 9½% in the fall. Last week the prime hit that level much earlier, and no one voiced the slightest belief that that would end the dizzying ascent from 6% in January. Bankers and economists are now forecasting a series of further rises to 10½% or even an unheard-of 11%.

The major reason is that the climb in the prime has not yet discouraged ravenous loan demand from business. No reason why it should, either: strangely enough, borrowing at...

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