FEAR OF INFLATION.

Manawatu Standard, Volume LXIII, Issue 23, 26 December 1942, Page 2

FEAR OF INFLATION.

PRICES IN BRITAIN. (N.Z. Press Association—Copyright.) (Ree. 1 p.m.) LONDON. Dec. 25. Christmas spending and rocketing uncontrolled prices struck a discordant note after the recent chorus of praise for the Treasury’s war finance technique, and the note circulation jumped by a further £12,250,000, making a total increase of £50.500,000 during the past four weeks. There arc two different schools of thought about the rising note issue and swollen Christmas spending. One holds that inflation prices arising from a disequilibrium between the community’s purchasing power and the volume., of available- goods can only manifest themselves in luxuries, the other school fears that the greater the pressure on the range of uncontrolled prices which is exercised by the mounting national income the greater will be the explosive adjustments of prices when the controls are removed and the more difficult the transfer to a peace economy.

What is really important is that the range and volume of goods purchasable has been drastically reduced by rationing and restrictions on supplies, hence the sharp swing up iu prices of uncontrolled goods, which some quarters regard as a grave inflationary symptom.