BRITISH ECONOMIC CONDITIONS

Dominion, Volume 33, Issue 284, 26 August 1940, Page 8

BRITISH ECONOMIC CONDITIONS

Three-Month Survey ACCELERATION OF WAR ACTIVITY (British OfllHai Wireless.) (Received August 25, 7.5 p.m.) RUGBY, August 23. The London and Cambridge Economic Services’ quarterly report on current economic conditions in Britain cover the first three months after the installation of Mr. Churchill’s all-party Government. The report, which was compiled byleading economical and statistical authorities, records a rise during this period of nearly 50 per cent, in the rate of the British Government’s war expenditure and a corresponding general acceleration of war activity.

Tlie unemployment total had lalleu by June 17 to 780.000, a figure which, it is pointed out. approaches what in some quarters used to be regarded as the normal minimum. No information is available as to l lie numbers withdrawn from civil employment lor service with tlie forces, but in view of the fall in unemployment, tlie attraction of new workers into industry and the continued rise iu wages and longer hours, it. is considered probable that the total national wage bill is still rising. Also the increase in the quantity of money continues. A rise of more than £('>0.000.000 in the Bank of England's note circulation is thought to be attributable mainly to increased desire for liquidity on the part of the population, but the additional notes may also have been needed for financing the large wages bill.

However, the conclusion of the report is that for tlie moment the danger of serious disequilibrium between tlie demand for the consumption of goods and their supply is largely being held in check partly by a response to (lie appeal for slaving and investment in Government loans and partly by a reduced willingness to make purchases in the uncertainty of tlie times. Tlie risk of any unfavourable development toward an inflationary position must be avoided by a reduction by means of increased taxation in the amount of incomes available for taxation and by the sales tax and the comments of the report make clear the reason for the criticism which recently met Sir Kingsley Wood’s supppiementary budget, which was felt by many insufficiently drastic in its taxation proposals.