By 1951 discount houses had been carrying on business in short-dated government stocks for more than thirty years. Table 4 shows that in that year houses’ holdings of British Government Stocks (end-year figures) stood at £314m (30·5 per cent of total portfolio). In 1952 they fell to £291m (27·3 per cent) but rose steeply in 1953 to stand at £383m (35·3 per cent). Holdings then fell during the following four years to the low figure of £223m (23·3 per cent) but thereafter grew year by year to stand at £488m (39·0 per cent) in 1962. After dipping slightly over the next two years, holdings rose to £500m (34·4 per cent) in 1965 and then climbed to their highest level since 1951, at £544m (31·1 per cent). Holdings fell sharply in 1968, recovered well in 1969 to £364m (20·0 per cent), and then dropped very sharply to stand at £160m (6·8 per cent), their lowest since 1951. In 1971 holdings recovered strongly to reach £391m (12·8 per cent).
KeywordsInterest Rate Monetary Policy Market Rate Bond Price British Government
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