Chapter I. The Home Economy

Total real output stagnated completely in 1977. Private and public consumption and gross fixed investment all fell, but this was slightly more than offset by relatively buoyant exports and by some restocking. Despite the very small increase in total final demand, the volume of imports rose by about 4 1/2 per cent, leaving gross domestic product virtually unchanged from its 1976 level. Unemployment rose, albeit erratically, by under 100 thousand during the year, and stood at just under 1.4 million in January of this year (Great Britain, excluding school leavers, seasonally adjusted). The rate of consumer price inflation began to fall in the second half of 1977; the consumer price index is estimated to have been just under 13 per cent higher than a year earlier in the last quarter. The balance of payments on current account moved into surplus in the second half of the year, but revisions to the official estimates of invisible trade mean that the surplus for the year as a whole is now estimated to have been only about £100 million.