“DISINFLATION” IN BRITAIN

Press, Volume LXXXIV, Issue 25549, 17 July 1948, Page 7

“DISINFLATION” IN BRITAIN

People Spending Less Money

SIR S. CRIPPS’S OPTIMISM

(Special Correspondent N.Z.P.A.) (Rec. 9 p.m.) LONDON, July 16. The fact that the people cf Britain are not spending their money so freely as a ’ year ago is not worrying the Chancellor of the Exchequer (Sir Stafford Cripps). In his own words, it is “just what we have tried to bring about, and the process certainly has not reached the point where we should consider any steps to counteract it.” Sir Stafford Cripps added: “I believe we have checked the inflationary trend. In a small way and in some isolated cases, some symptoms of disinflation are beginning to appear.” The Chancellor explained the difference between deflation and disinflation in terms of a car tyre. Disinflation, he said, was letting the air out of a hard tyre to get it to the right pressure. Deflation was the result of a puncture which stopped the carHe confirmed reports that the people were buying less. There had. he said, been “an appreciable falling off” in the

demand for such things as radio sets, electric clocks and electric appliances for the home such as carpet sweepers. Expensive hotels were no longer crowded out. The high charges for holiday facilities were reducing holiday traffic. London theatres were having a bad period, and cinema queues were noticeably shorter. This evidence that the people had less mopey to spend, he emphasised, was no cause for alarm. There was ;iq need to see in it the beginning of a slump. “No one need fear wholesale unemployment,” he added. “That will come cply if we are unable to raise our output high enough to pay for our food and the raw materials needed by industry.” Sir Stafford Cripps also gave an assurance that, if necessary, steps would be taken to prevent deflation —or disinflation —from going too far. He said that the response made to the Gov-* ernment’s appeal for the stabilisation of prices and profits had been encouraging, but he regretted that labour was still moving far too slowly info under-manned industries. More people were still wanted in the mines, the mills, and on the land, and fewer in distributive trades. Steel production must be increased even at the risk of over-supply.