The Sterling Crisis: A suburb focuses on survival: The high streets
Thursday 17 September 1992
But then he allowed himself a brief smile, as he remembered his 'clever wife'. Along with many others who foresaw yesterday's interest rate rise, she had taken out a 9.95 per cent fixed rate mortgage the day before, so saving the solicitor and his family a hefty sum on their pounds 60,000 mortgage. Not everyone has been so prescient.
The solicitor received the news from the Bank of England as he digested a late lunch at the Bella Pasta Italian restaurant in Kingston-upon-Thames, the constituency of the Chancellor, Norman Lamont. The news did not help the digestive juices as he spat out his views on the Government, and what it had done to his business in the last five years. But he will survive, even if his spleen does not.
So will Yves, the music teacher who was playing Mozart's flute concerto in G major around the corner from the restaurant as the solicitor ordered a black coffee and brandy to help him recover from the shock.
'I'm making between 30 and 40 per cent less than I did two years ago' he said as the Kingston public threw a few coins in his direction. 'I used just to play on Saturdays, but now I'm having to play on weekdays as well. This announcement is not going to make things any better.'
It was to be a constant refrain from Kingston shoppers as the news from the Bank of England got progressively worse. However, this is Kingston. Once, it had the lowest level of unemployment in London and a wealth which made it the second most desirable retail location in Britain. The affluence is not so evident today, but Mr Lamont's constituents are not about to march on Westminster and lynch their MP.
They may stop spending so much at Marks & Spencer though. Loading up pounds 40.30 of prawn terrine, various prepared meals, and other M & S necessities, one woman was in a tearing hurry to get out of the store and like the solicitor refused to believe the extent of the increase. When persuaded, she slowed down on her way to her car using words like 'devastation', and 'disaster'.
She is the wife of an accountant, and will weather the storm. But she does worry about the children. 'I have two children who are first-time buyers. What's going to happen to them? The housing market is non-existent at the moment. Because of this increase, there will also be lots more repossessions. It's a disaster area.'
If there are first-time buyers trawling the house market in Kingston-upon-Thames, they weren't doing so in the offices of Gascoigne-Pees. Stephen Hewlett, the manager, said there hadn't been any customers in the office since the announcement in the morning of the 2 per cent increase in base rates.
'This is not the news we were waiting for to say the least. It will drive the whole market even further down and we'll be back to the 1989 situation.'
In 1989, Ferguson Kent was a struggling assistant at his father's fruit and veg stall in Kingston market. In those days, his father Charles was looking forward to retiring from the job he had been doing since the end of the war. Before yesterday's announcement, he had realised he would probably have to put off his retirement to help Ferguson with his pounds 120 month mortgage repayments. The Bank of England's announcement make it a virtual certainty if they stay at the same level.
The Kents' colleagues at the market are also suffering. Five or six stalls have been forced to close in the last two to three years and everyone has been affected by the recession.
Charles Kent said: 'People used to come to the market almost every day but now they are coming only occasionally. They realise that what they save by coming to the market is taken away by the car park fees. Today has been a bad day.
'It costs me pounds 130 a week to rent my stall and by the time I have paid for my lorry and van, my expenses are over pounds 200. I have lost money this year and I can't see how things are going to improve particularly because of the increase in interest charges announced today.'
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