Interest rate pressure

British interest rates look set to rise by a further half point early next month after the pound touched an all-time low against the German mark on Wednesday. It also emerged this week that the Chancellor and Governor of the Bank of England are concerned about sterling's weakness.

The Governor said the strains in the currency markets could last for some time. If the effect on the pound persisted, it would need to be taken into account in setting monetary policy. The Chancellor agreed that ``developments in exchange markets would have to be kept under review.''