Hints of pact as inflation soars in U.K.

Press, Issue 33846, 19 May 1975, Page 15

Hints of pact as inflation soars in U.K.

(N.Z.P.A.-Reuter—Copyright)

LONDON, May 18.

The British Opposition Conservative Party yesterday stepped up its attack on the Labour Government’s economic policies amid suggestions that the Opposition would support an emergency package of measures to curb the still-spiralling inflation.

Sir Geoffrey Howe, the Conservatives’ chief spokesman on finance, called for a “harsh prescription which included Government abandonment of further nationalisation measures, and absolute cash ceilings on public sector spending budgets in the next year. His stern speech at a pub-j lie meeting in London came] after an official announce-] ment that the cost of living; in Britain rose by a record | 3.9 per cent between last March and April, bringing the rise in prices over the last 12 months to 21.7 per cent.

This indicated an annual inflation rate this year of more than 30 per cent, according to leading economists.

The hint of temporary support came from the Leader of the Opposition (Mrs Margaret Thatcher) in a television interview. “Where the Government does what is in the national

i interest we. the ConI servatives, have supported I them and will continue to i put country before party,” [Mrs Thatcher said when questioned on the national economy.

She said Britain was nearer the brink of economic break-down than it had ever been, but she believed the break-down would not happen. The Department of Employment blamed the continuing inflation on higher rates and water charges, rents, fuel, and electricity I costs, food prices, and increased transport fares. Tax increases imposed in the Labour Government’s recent Budget are not yet I reflected in the retail price ■ index — and the Chancellor I of the Exchequer (Mr Denis Healey) conceded they would add a further 2.7 r per cent.

While British inflation is on the increase, inflation rates are falling in. other major industrial countries.