BRITISH TRADE OUTLOOK.

New Zealand Herald, Volume LVIII, Issue 17909, 11 October 1921, Page 7

BRITISH TRADE OUTLOOK.

FROZEN CREDITS THAWING. SLOW REVIVAL OF BUSINESS. LONDON. Oct- 1. The financial editor of the Times, commenting on the revenue figures for the past six months, says that with a decrease already of £163.000,000 the prospect of fulfilling the Budget estimate of a decrease of £200,000,000 for the whole year has faded away. The expenditure was £698,000,000, a decrease uf £43,000.000 compared with the same period last year. The floating debt at the end of September was £1,320,000,000. am increase of £45.000,000, from March 31. Next quarter heavy outlays for railways, agriculture, and unemployment will swell the extraordinary expenditure bv about £60.000,000. and fresh inflation will be inevitable. Consequently the Bank of England had not followed the example of the New York Federal Reserve Bank in reducing the discount rate to 5 per cent. Hitherto the financial policies of New York and London have followed parallel courses. Last week the Treasury sold £60,000,000 worth of bills under 4 per cent., and this week the rate is nearly 4j per cent. There has been considerable progress in tho liquidation of frozen credits, but the trade revival is slow, though the financial activity is distinctly better. The South African £5,000.000 loan was covered in 24 hours, and the next loans expected from New South Wales are likely to be underwritten next week

India has been buying wheat from the United States for the first time for years, having hitherto shipped supplies from Australia when local wheat was scarce. The Board of Trade is making arrangements to enable the spelter works in South Wales and Endasid to obtain zinc concentrates in order to resume operations. The Times index of prices for wholesale commodities is 180.8 or 80.8 above 1913. Last month's fall of three points was entirely due to cheaper food. A year ago the index number was 318. For the first time since March. 1920, tho index number of raw and manufactured materials has risetn indicating a revival in the demand for traide purposes. For rubber .and certain other good? the prices ar6 very low, encouraging buying. The follv of recapitalising old companies at inflated boom values is becoming more apparent. Several industrial companies, floated in 1919 and 1920, have not paid dividends, and in some cases are beincr reconstituted. The city editor start.es that the first payment was rrade vesterdav on account of'LB7.COO.OOC due from Australia to Britain The instalment amounted to £3.000.000, covering interest and sinking fund. Apart from this the balance of the total war debt of £400.000.000 will be entirriv raised in Australia, which has dcfmitelv s-houldered and is meeting the full service of its whole war debt, in striking contract to most European combatant*. This factor in exchange must entail larger expf'ris from the Commonwealth. Fortunately the prospects are favourable, the wheat outlook heme excellent.