The Economic Situation: Chapter I. The Home Economy

The recovery in economic activity which took place in the third and fourth quarters of 1968 has been sharply braked in the first three months of this year.However, the picture provided by the published national income statistics of the movement in output in the last quarter of last year is a confusing one : the income and output measures showed increases of 1 per cent on the third quarter level, whilst the expenditure-based measure showed a rise of some 3½ per cent. Averaging the three gives an increase of nearly 2 per cent, but even this should probably be regarded as an overestimate of the true rise in output ; the expenditure figures throughout 1968 showed considerable variations, associated with marked movements in consumers' expenditure which were probably not correctly offset by changes in the recorded stockbuilding figures, and the fourth quarter of 1968 again saw a very large rise in consumers' expenditure, partly reflecting anticipation of the November measures.