The Economic Situation

It is increasingly clear that the United Kingdom economy is moving into a difficult period. The levelling out of production has continued: output and demand ceased to expand during the summer. An abnormally large part of output seems still to have been going into stock accumulation. When this stops, as is likely, output may well fall for a time. Even apart from this possibility, demand cannot be expected to regain its former expansiveness for some time. The Government's freedom to redress the internal balance of the economy is hampered in the short term by the weak balance of payments position, largely arising from our poor export performance. Nor is the world situation likely to make things easier for Britain: world markets are expanding much more slowly than last year.