Bank of England sets record interest rate

Press, 15 September 1976, Page 24

Bank of England sets record interest rate

NZPA-Reuter London The cost of borrowing money from Britain’s commercial banks went up on Monday, but the higher interest rates forced by the Bank of England failed to support sterling on foreign exchanges. The central bank, in a move designed to make sterling more attractive to foreigners, raised its minimum lending rate on Friday to 13 per cent, equalling the highest rate. The “big four” commercial banks — Barclays, National Westminister, Midland, and Lloyds — reacted on Monday by increasing their base lending rates from 10.5 to 12 per cent. The interest rate for de-

positors went up a full 2 per cent to 8.5 per cent. The banks’ increase will probably mean that the building societies will have to raise their mortgage rates, hitting millions of home-owners, but there will be no decision for at least a month, managers say.

Sterling initially benefited from the Bank of England’s lending-rate increase, and the postponement for 15 days of a threatened British seamen’s strike, but the pound later lost ground and finished nearly half a cent down from Friday at SUS 1.7482. At one stage in the morning the pound reached $1.7615.