British Economic Boom Is Unabated

Press, Volume CIII, Issue 30445, 20 May 1964, Page 12

British Economic Boom Is Unabated

(Special Correspondent N.Z.P.A.) LONDON, May 19. Britain is in the midst of an economic boom which shows no signs of abating. It may continue for another twelve months. But the boom could get out of hand and run into inflation.

These are the main conclusions of a report by the National Institute of Economic and Social Research, which is recognised as one of the most authoritative independent voices on economic affairs.

It forecasts that during the next 12 months British production will go on rising at a rate of about 5 per cent, and that by the middle of next year unemployment will fall to less than per cent of the employable population. Unemployment at the moment is about 412,000. If the forecast is realised, it will drop to -360,000. Wages Higher The report states that exports will go up by 6 per cent. Imports will rise too, but less sharply. This will he.lp the balance of payments. Wages will get bigger by 7 or 8 per cent. As the shortage of -labour becomes more acute, profits may go up even more. The report points out. that Britain’s position is not unique. Most industrial nations appear to be going through a similar, prosperity phase. Both the American and West German economies are expanding fast, and world production .as a whole is expected to rise for the rest of the year and In early 1965. “All this creates dangers,” says the report. “The boom lias now reached the point where it. cannot readily be checked. To stop projects half-way is wasteful, to apply disincentives is to induce an .investriient slump a long time later. ' ■

“Thus there is little, choice but to ride out the investment . boom and the consequent pressure on the capital goods industries.”