MONETARY POSITION

Evening Post, Volume CX, Issue 53, 31 August 1925, Page 7

MONETARY POSITION

WHY, THE BANK RATE STOOD

THE OUTFLOW OF GOLD,

(united races association—corißiaHT.) (AUSTRALUN-NBW ZEAUND CABLE ASSOCIATION.) (Received 31st August, 9 a.m.) LONDON, 29th August. Hopes of a further reduction in the Bank of England discount ■ rate prevailed until Wednesday, when ii was announced that £833,000 in gold had been withdrawn from the Bank of England, making the total efflux £1,300,000 [ since tho, rate was lowered to .44 per cent. These movements extinguished all ideas of an early reduction to 4 per cent., and the result was a general, though slight, easing of Stock Exchange prices, which previously had been verjj firm in anticipation of the reduction. • But "markets are still comparatively) good in tone, and the outlook for increased business seems. hopeful. As one of the financial journals said.: "The more vigorous the manner in which international debt questions are being tackled is certainly encouraging, • and the degree io which certain indus. trial shares are being supported would suggest that we are believed to be much, nearer trade revival than is apparent* from surface indications, but, unfortunately, shares so favoured hardly belong to our staple industries." • ' Monetary conditions should bb easier next week, for nearly £20,000,000 of Government dividends are due for disbursement on Ist September, and there is likely to be a revival of talk about bank rato reduction. But it must bo borne in mind that in tins regard" it is necessary to look for other factors ,than those represented by conditions itt the short loan market. Indeed, any further decline in the bank rale "must depend upon how matters shape in regard to th» gold demand and the course of money rates in America. .