LONDON (November 13): THE British Government today declared a state of emergency and at the same time the Bank of England raised its minimum lending rate 1.75 per cent to a record 13 per cent as the country's trade deficit plunged last month to a record GBP298 million.
A Government spokesman said Parliament would be asked later today for special powers to impose restrictions on the consumption of coal, oil, and power.
The move came as power blackouts threatened due to bans on overtime being instituted among the nation's coal miners and electricity engineers. The unions voted against working extra hours to press their demands for pay rises higher than the level allowed under the Government inflation programme. Prices immediately fell on the London stock exchange.
The increase in the bank's lending rate was aimed at limiting the expansion of credit, official sources said.
'The latest increases show a further large increase in lending and make it clear that further action is required to curtail the demand for credit.' The case for this, they added, was reinforced by the October trading figures.
This deficit was GBP121 million higher than the loss of GBP177 million incurred by Britain on its foreign trade in September. In another move to reduce bank lending, the Bank of England asked Britain's commercial banks to lodge with it an additional two per cent of their total deposits.
