Steadied Sterling

Six months ago, to fight domestic inflation and to check a flight from sterling so headlong that devaluation seemed due, the Bank of England hiked its bank rate sharply from 5% to 7%, the highest level in 37 years. The shock worked. The flight was reversed: gold and dollar reserves rose $689 million, and by the first of the month stood at $2,539,000,000, best since 1955. In the world's money markets, the pound's worth rose from a low of $2.78 to $2.81. Last week the bank's bowler-hatted runners fanned out again from Threadneedle Street to tell lesser banks and exchanges that its rate was cut. The new rate: 6%.

This limited success does not "imply any general relaxation in monetary policy," the bank announced; inside Britain, the credit squeeze against creeping inflation will continue.

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