Surprise is something of an understatement when it comes to describing the City's reaction to the decision of Chancellor Gordon Brown to loosen the ties that bind the Bank of England to the Treasury.
Note the word loosen. The changes announced last Tuesday did not amount to the creation of an independent central bank. Moreover, the Chancellor has reserved the right to re-assume the powers he has delegated if he considers it appropriate, while inflation targets remain the provenance of Government.
Overall, markets greeted the move with considerable enthusiasm. Gilts took particular heart from the de-politicising of the interest rate weapon. Even so, there remains a significant premium in yield terms between British government stocks and German bonds. The closer we got to joining a single European currency, the more difficult this disparity will be to justify. But it is hard to see the premium vanishing until we have a better indication of how the economy will be managed.
We may even have a few surprises there. Mr Brown's move on the Bank might have been welcomed overall in the Square Mile, but I do not recall reading or hearing of this move as part of New Labour's policy in the run-up to the election. If Mr Brown can deliver surprises like this so soon after he assumes power, heaven knows what he may have in store for us when the first Labour Budget is delivered.
Debating some of the other changes that life under Labour may bring to business and the City on the radio earlier this week, I was amazed at the Damascene conversion of those who in the past would have stood out strongly against the Social Chapter. It seems the minimum wage is unlikely to be the threat once feared. There is even a belief that some sectors of the economy might reasonably be expected to prosper mightily under Labour. Telecommunications and media were two areas selected by David Muir of Ogilvy and Mather, whose report, The Devil's in the Detail, gives a snapshot of how he believes the Labour approach will make the world seem very different in corporate Britain.
Given the new digital revolution, perhaps we should be examining multi- media companies more closely in any event. Cynics might say that BSkyB is bound to prosper under a Blair administration, given the groundwork already put in by Rupert Murdoch. Quite what we will do with all these new television channels I am not certain but those companies must be looking forward to the future with confidence.
The property sector is another area that might benefit. Not only are there signs that the strength of the economy is beginning to spill over into greater enthusiasm for property investment and development, but falling gilt yields are likely to make property assets - and the shares of the companies who invest in them - that much more attractive.
Land Securities is the daddy of them all, although the shares are close to their high. But then so is the market. Still, with the yield fully 15 per cent above the market average, it looks a good widows and orphans stock.
Once again Wall Street is the driving force for our market. The growth in demand for financial assets in America has undoubtedly helped buoy stock values, but it is as well to remember in this digital age that market moves can take place very swiftly indeed.
There seems to be a growing technological bent this week - appropriate as one real growth industry is computer software. As well as the ticking millennium time-bomb, coping with a single European currency is exercising minds. For those who wonder how to benefit from the way our continental cousins are cashing in, a software provider is a good bet.
Brian R Tora is chairman of the investment strategy committee of Greig Middleton & Co (0171 392 4000)Reuse content