The Press WEDNESDAY, JANUARY 8, 1969. Britain’s Economic Prospects

Press, Volume CIX, Issue 31881, 8 January 1969, Page 10

The Press WEDNESDAY, JANUARY 8, 1969. Britain’s Economic Prospects

Although the year ended rather more hopefully than most observers expected, Britain’s economic outlook is still the subject of anxious appraisal. Fortunately the gloom generated by the October trade figures was shown by the November results to be excessive. Some politicians and businessmen had worked themselves into a state bordering on hysteria: and newspapers were urging Britons—as the “ Economist ” said afterwards—to give up party political argument and see members of Parliament who were elected on widely differing prospectuses “coalesce into a pudding government”. These prophets of gloom have been silenced, for a time at least.

The “ Financial Times ” has noted that the trade figures for November not only looked good, but were good. Though imports remained high, a significant improvement on the side of exports saw receipts jump from £526m to a new record of £s6lm. The deficit on the visible trading account was only £l7m. which meant that the current account (which includes invisible earnings running at some £3om a month) was in surplus in November. A single month’s figures may be misleading; and because speculators are inclined to read too much into them, the Board of Trade is being urged in some quarters to issue trade figures only every three months. The trade figures for three months show a rise in monthly exports from £sl4m to £543m: and some observers have suggested that the advantages of devaluation are only now being felt. If this is so. some further improvement in the trade balance might be expected when measures to curb imports become effective.

These are welcome gleams of hope: but they do not disperse the encircling gloom. The “ Economist ” regards the prospects for 1969 as “ very worrying ”, Britain’s special weakness, it says, remains the magnitude of the short-term liabilities which have been accumulated since the war. While it is so heavily indebted, the British economy is perilously vulnerable to both internal and external pressures. Protectionism, which would contract world trade, and monetary chaos are especially to be feared. What the Wilson Government’s critics regard as maladroit management of the economy must be taken into account; but it is encouraging to notice that the policies of his much-criticised administration are now showing at least a reasonable chance of success. Lord Balogh, the former economic adviser to the Wilson Cabinet, felt able to say, just before Christmas, “ Some of my colleagues point to the “strategy of the Government since devaluation and “ argue, quite rightly, that on all past experience “ Britain has every chance of rising from the “ doldrums