BRITISH TRADE RECOVERY

Press, Volume LXXXVI, Issue 26125, 30 May 1950, Page 5

BRITISH TRADE RECOVERY

Optimism Shown In Surveys “ MORE CONFIDENT FEELING ” ( Special Correspondent N.Z.P.A.) (Bee. 10 p.m.) LONDON, May 29. Although reservations are not lacking and the emphasis is still much upon caution, it is now generally admitted that since the beginning of the year there has been a most encouraging improvement in Britain's trade and financial situation. There is admittedly no agreement as to whether this has occurred in spite of. or because of. Government policies but it is conceded, even by some persistent critics of the Government, that so far devaluation has heiped rather than hindered British recovery. There has, as a result, been a more optimistic tone in recent trade and financial surveys and this has been reflected in an improvement in sterling rates both in Zurich—which usuaLy indicates Continental feeling—and in New York. This more confident feeling has been strengthened by reports from official American sources that the present traae boom in the United States is lively to continue at least until the end or his year and by the conservatively favourable view of Western European recovery taken by the Economic Commission for Europe in its latest report. London Defence Talks Another factor reinforcing confidence is the favourable American r.actionto the recent London defence talks. This has strengthened the belief rpat when Marshall Aid ceases in 1952 c.rect American economic assistance to Britain and Europe will be continued in a modified form and not t ruptly terminated as was lend-lease a,;ne end of the war. The most hearten.ng feature of the F- sent situation seems to be the 5 cy improvement in the gold and ' iar reserves of the sterling area. ih 2 . 5 is attributed to various causes, of v men devaluation is onlv one, but the fne act remains that in the six months l :Oin ? April 30. when figures were - given, the sterling countries had in : roved their gold and dollar holdings bv 550.000.000 dollars. This improvement is stated to be

V:'l continuing and supports the hope it was scarcely a contention—expressed in the last Government t-«nomic survey that Britain mav sn approximate balance in her

overseas payments this year. Oner and more recent indications of ±sntnn s progress include the followrecord export orders placed t L JS x'? ars - British Industries Fair; ine net that iron and steel production is nov so high that it has been pos-s-cle to permit free sales other than s ? ee * body steel; the continuing e l of orders f°r British textiles t -’ pes - and for motor-vehicles, a ”L - stead - v increase in the export production of these industries: the accelerated disappearance or modification ol such war-time austerities as fooG points rationing, clothes rationing, and petrol rationing; and the extensive expansion plans of various important industries. . The Iron and Steel Federation, for instance, undeterred by talk of nanonalisation. is already preparing another five-year development plan involving an expenditure of at least anC jL er £125.000.000 on new plant—this saaed to the £250.000.000 the industry nas invested in development in the last five years. Discontent at Living Costs To some extent these favourable developments are blanketed by the discontent caused by the high cost of living and heavy taxation, by fears that ’he volume and cost of imports may overtake that of exports, by the rising cost of raw materials ana'by the inevitable tendency to attribute political motives to any undue parade of British progress. It is also emphasised that while the goid and dollar reserve position is at last improving the United Kingdom's present reserves, even on the most favourable estimates, are still only ■bout one-sixth of what they were at tie outbreak of the war in terms of present-day purchasing power. For these and other reasons it is ; probably going too far to claim as one popular newspaper did this week that Britain is now enjoying the biggest industrial boom in her history without knowing it. Nevertheless, it is fair to | recognise that British industrial out- j put to-day. in spite of all difficulties, is 40 per cent, more than it was four years ago. that unemployment has never been lower and that the overseas trading position, although still very difficult, is improving. What effect this improvement may have upon the complex nolitical situation in Britain it is difficult to say. out it is reasonable to assume that it may change the oninion of some Government leaders that time is against tnem and that they should therefore ; go to the country again as soon as• possible. There is at the moment little j indication that another election, now j er n the immediate future, would ! prj?y= any more decisive than the. last. j Th=t being so. the disposition of the ’ Government to stay in office as lons ss possible so th a t favourable trends may develop, is likely to increase.