ECONOMIC POSITION.

Manawatu Standard, Volume LX, Issue 229, 26 August 1940, Page 8

ECONOMIC POSITION.

SURVEY IN BRITAIN. (British Official Wireless.) RUGBY, Aug. 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 allparty Government. The report, which was compiled by leading 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. The unemployment total had fallen 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 No intormation is-available as to tho numbers withdrawn from civil employment for service With the forces, but in view of the fall in unemployment, the attraction of new workers into industry and the continued rise in 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. £60,000,000 in the Bank of England’s note circulation i 6 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 the moment the danger of 6erious disequilibrium between the demand for the consumption of goods and their supply is largely being held in check, partly by a response to the appeal for saving and investment in Government loans, and partly by a reduced willingness to make purchases in the uncertainty of the times. The risk of any unfavourable development toward an" inflationary position must be avoided by a reduction by means of I increased taxation in tho amount of incomes available for taxation and by the sales tax. The comments of the report make clear the reason for the criticism which recently met Sir Kingsley Wood’s supplementary Budget, which was felt by many to be insufficiently drastic in its taxation proposals.