New Boom in Britain

London's stockmarket soared to an all-time peak last week. For the first time in history, the industrial index of the Financial Times broke through 200, climbed a record 5.8 points to a new peak of 204.4 before it eased off. In one day, market-leading Imperial Chemical Industries rose 1 1/2-c- to $7.70, Courtaulds climbed 45 1/2-c- to $6.30. Steels, machine tools, electrical equipment companies all headed upward. Not only were Britons busily buying, but Americans also gave the market a boost as they snapped up stocks. On the American Stock Exchange, I.C.I, was one of the most heavily traded stocks last week.

The new boom was due to the Conservative Party victory and the prospect of more encouragement of private enterpirise. Actually, the London market had anticipated the election's outcome, had begun to move upward (from about 183) three weeks before the nation went to the polls. What surprised both Britons and Americans was that the market kept rising in the face of a paralyzing national railway strike (see FOREIGN NEWS). Most financial and political experts, trying to explain this paradox, calculated that one big factor was an end to Labor's threat to renationalize steel and long-distance trucking, nationalize chemicals and machine tools, etc., and the promise of widepread expansion of industry.

I.C.I., which has poured an average 100 million yearly into plant expansion nd modernization since the war, decided to roll ahead with more expansion. Britain's steel industry announced that it will boost production 5% this year (to at least 19.5 million tons), go ahead with blueprints for expansion that call for spending up to $180 million yearly over the next three years.

British businessmen believe that, over the long run, the election will lead to new tax reforms, thus provide more incentive for taking risks and more capital for new ventures. The Conservatives are also expected to continue to look for ways to achieve sterling convertibility.

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