MINOR SLUMP FORECAST

Press, Volume XCVI, Issue 28414, 22 October 1957, Page 15

MINOR SLUMP FORECAST

Comment By Mr Gaitskell

(N.Z. Press Association—Copyright) LONDON. October 20.

The Leader of the Labour Opposition (Mr Hugh Gaitskell) said today that there was a real prospect of at least a minor world slump.

He told a Labour meeting at Weymouth. Devon: “The collapse in Wall Street and on the Stock Exchange, the sharp decline in raw material prices, plus other signs, all point to this.” Mr Gaitskell was criticising the Government’s new policy on the raising of interest rates, frozen bank credit, and the cutting of public investment. He said that the Government must make up its mind whether it wanted to encourage or check industrial expansion. The foreign exchange crisis, he said, was not caused by Britons producing, investing, or even consuming too much at home. “The 7 per cent, bank rate may have been needed temnorarily to deal with this, but there is no case for letting it go on until it cuts down production and investment at home.” he added. Production in Britain had begun to rise in the last few months, but it would be checked if this “stupid policy. conducted in panic.” was continued.