from an economics correspondent
The Sunday Times business news editor calculated in the February 20th issue that the Bank of England had spent about £300,000,000 in foreign exchange during the last three months of 1965 to sive sterling. This huge sun was used to "unwind" forward deals carried out in the June=Septenber sterling crisise In Jume-Septenber, Britain's gold reserves experienced a true fall of £450,000,000 despite the fact that the official figures indicated a fall of just under £100,000,000. Mre AnthonyVice, who made this his lead item, culled these figures from United States balance of payments statistics, which have just become .vailable ih Britain, "These statistics," he points out, "show, for OctobersDecember a £400,000,000 shift in American benks* deposits from foreigners, That shift, according to the U.S. official coment y, reflected the strengthening of the pound, which led foreigners to buy pounds in exchange for dollars from official British agenciese "Of this £400,000,000, just under £100,000,000 was reflected by an increase in Britain's published gold reserves. /iccording to the U.S, data, we repaid only about £60,000,000 of the-Federal swap in October-December." Whilst these rather technical details nay seem remote from dayetowday politics, in practice, they underpin the whole econonic and political policies of the Governnent, The position of British capitolisn Was worse than we were led to believe. Moreover, rescue operations of this kind cannot be repeated indefinitely. Hence the tremendous pressures on the Goverment to get 2 "permanent" solution by rationrlisation, by putting the unions in their place, etc. These figures, plus the poor trade returns for Jonunry should serve to indicate to us that 1966 will gee more trouble for whatever government is in powere Sad to say, it appears that Lobour is just as likely as_ the Tories to seek to solve this at the expense of the workerse Soon the union conferences will start; : Mr. Wilson should get a warning from each of these conferences that he is in for big trouble if he puts the 1966 sterling difficulties on the backs of the trade unionistse