I.M.F. Team To Visit Britain

Press, Volume CVIII, Issue 31830, 7 November 1968, Page 11

I.M.F. Team To Visit Britain

(N Z. Press Association—Copyright)

LONDON, November 6.

A team from the International Monetary Fund is due in Britain soon and the question is now being asked—will the visit result in more financial restrictions?

The I.M.F. has visited the country at least four times this year and three of the visits have been followed by a further tightening of the squeeze.

Because the I.M.F. lent Britain SUSI4OOm as a result of devaluation, it has the right to examine the economy three times a year. The first visit came in February when the country was undergoing a pre-Budget spending spree. An extremely tough Budget followed. Indeed it had to, to make devaluation work.

The next visit came in May. On May 24 the big bank credit squeeze was introduced but the Government has denied that this was caused by the I.M.F. visit.

They were here again in July and after their departure the Chancellor of the Exchequer (Mr Roy Jenkins) issued a warning on credit and consumer spending. As well as these three visits there has been a special team in Britain discussing Britain’s money supply. The combined efforts to cut consumer spending should have been introduced right at the start of devaluation

for them to be wholly effective. But faulty Treasury forecasting is reported to have meant that spending has not been checked enough. The latest batch of hirepurchase restrictions, announced last week, are a further attempt to cut consumer spending. These measures take controls back to the level imposed in the 1966 crisis. The tough April Budget, it had been hoped, would cut down on consumer spending enough to leave room for the growth of exports. But things did not work out quite as they had been forecast. The President of the Board of Trade (Mr Anthony Crosland) said that consumer spending had been expected to be lower in the second half of the year than in 1967 but it now looked like being roughly the same.

Retail sales were starting to climb after a post-Budget decline and new car registrations were increasing too. If these latest efforts do not produce the desired effect then the men from the I.M.F. may have some more suggestions for the Government before the year is through.