BRITISH ECONOMY Contradictory predictions

Press, Volume CXIII, Issue 33120, 10 January 1973, Page 11

BRITISH ECONOMY Contradictory predictions

IN Z.P.A.-Reuter—Copyright)

LONDON, January 9. A group of Cambridge University’ economists predict that Britain could face a balance-of-payments deficit of £looom this year. But another forecast published today says that Britain is on the threshold of by far the fastest period of economic growth in her history .

The pessimistic outlook is ■contained in the “London and Cambridge Economic

Bulletin,” and one of its authors is Mr Wynne Godley, formerly the chief economic forecaster for the Treasury. The Cambridge economists say that the Conservative Government’s drive against inflation got off to an extraordinarily bad start because of a rapid deterioration in the balance-of-payments position and the demand for imported goods. To improve the balance of payments, severe restrictions on personal snending bv the population will have to be made, they add.

The optimistic forecast comes from Professor F. W. Paish, of London University, in the latest issue of the “Lloyds Bank Review.” He said: “A growth rate of 5 per cent a year should be sustainable for the next three years, and perhaps indefinitely. Inflation is the only threat to such economic advance.”

The contradictory nredictions came as the Government is considering measures against inflation to go into “fleet when the nresent pricewave freeze ends at the end of Tho Prime Minister (Mr. Heath) and the Chancellor of »be F.xcheouer (Mr Anthonv Barber) met senior Cabinet Ministers and officials for four hours at Chequers last night to map future policy.