BRITAIN: Test of Nerve

The British have many sterling qualities, but right now sterling is not one of them. Just four months ago the pound was worth $2.02. Last week sterling tumbled no less than four cents against the dollar in a matter of a few hours. It dipped to a historic low of $1.705 before recovering its shaky moorings and closing at $1.7 16.

British officials called the fall an "erratic fluctuation." That view may be overly sanguine, but there was indeed no evidence, for the moment at any rate, of a massive flight from sterling. Yet the sudden plunge left no doubt...

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