Writing in the Jamiary 4th Guardian, its financial editor said: “In fact, tho impact of the lower bank rate on business activity is not liksly to be great. It is a matter of taking the horse to wator. The banks olready have plenty of money to lend. Many firms in industry and trade have run down their stocks and streamlined their organisations in the past yen: or so, All they nood now is orders, Hut cheaper and oasior money may well holp to specd up the process of rebuilding stocks which wes due to begin soon in any case,
"It will take its place with the other aspocts of Govornment policy that are aimed at crenting more demand and reviving business confidence, Iinvestora mst not overlook the fact that these mensures have become nacessary because things were going badly. Industrial production has not maintained the expansion that seemed to be under way earlier this year, capital investment is declining rather more sharply than expected, and exports have levelled off. The dowmright pessimistic forecasts now coming from most leaders of the steel industry” indicate that it will take sustained offorts of fiscal and monetary a policy to revive activity in the heavior industries, Here it is the longterm rate of interest rather than the short money rates that necds to come down before demand can be expected to respond."