Business & Finance: England’s Bank

A change in the discount rate of the Bank of England has always attracted world-wide attention because of its far-reaching effect on international trade through the international financial center at London. Upon July 5 the Bank’s rate was moved up to 4% from the 3% rate which had been maintained since June 15, 1922. The change has brought the Bank of England’s rate to within ½ of 1% of the 4½% rate now maintained by the New York Federal Reserve Bank.

The interesting phase of the occurrence to Americans was the proof which it afforded that the New York money market was the most powerful international market in the world today, and that the making of Federal Reserve rates must in the future be considered largely from the angle of their probable international effects. London cannot challenge New York’s financial leadership until sterling returns to its par of $4.86, and until Britain allows the free export of gold.