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The Economic Situation: The Home Economy

Published online by Cambridge University Press:  26 March 2020

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Extract

This appraisal of the economic situation sets out to do four things. First, it re-examines the pre-Budget position and prospects : there are three months' more figures now. The revisions to the pre-Budget demand prospects are, on balance, upwards. Secondly, it tries to quantify the effects of the Budget measures-in particular the selective employment tax. Thirdly, the crucial balance of payments forecast is redone. The figures come out a little better than those of February. Finally, something is said about the seamen's strikethough no attempt is made to incorporate its consequences into the figures in the basic tables.

Type
Research Article
Information
National Institute Economic Review , Volume 36 , May 1966 , pp. 4 - 20
Copyright
Copyright © 1966 National Institute of Economic and Social Research

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References

Notes

note (1) page 4 See page 15.

note (2) page 4 This follows from the faster growth in wage-rates and the upward revision to the estimates of import prices (mainly because of copper).

note (3) page 4 2.7 per cent a year, as against 2.9 per cent.

note (1) page 6 The full set of assumptions made about the effect of the surcharge is given in table 12, page 19.

note (1) page 7 The estimated total for all types of British investment in Australia, New Zealand and South Africa in 1965 is about £100 million.

note (1) page 9 Over this particular period, the wage-rates figure is a little below the trend, because of a large crop of wage awards in the first quarter of 1966. The consumer prices figure is a little above the trend, since this period includes two first-to- second-quarter changes, when consumer prices tend to rise sharply because of increases in local rates.

note (2) page 9 Including a ‘normal’ positive balancing item.

note (3) page 9 Excluding temporary losses made up later.

note (1) page 10 The following estimates show the regional effect of the tax. They show the difference in £ million between the regional effects of this tax and a poll tax designed to raise the same sum spread evenly over the whole working population. A plus sign indicates that the present tax is favourable to the region, and conversely :

note (2) page 10 Cmnd. 2986.

note (1) page 12 The pattern in recent years of the seasonally adjusted figures has shown a steep rise in the early part of the year followed by a period of stability.

note (2) page 12 It is possible that in their expenditure figures local authorities have included some items—for example, sewerage and approach roads—which should not really be entered as housing at all.

note (1) page 15 This is the ‘reduced’ programme in ‘Public Expend iture : Planning and Control’.

note (2) page 15 National Institute Economic Review No. 35, February 1966, table 15, page 24.

note (3) page 15 During 1965, hourly wage-rates rose 7.2 per cent. The forecast movement from the end of 1965 to mid-1967 is at an annual rate of 6 per cent.

note (1) page 18 For a discussion of the uncertainties which surround this part of the forecast, see National Institute Economic Review No. 35, February 1966, pages 30-31.

note (2) page 18 In the tax figures in the personal income and expenditure table, the Central Statistical Office deduct income-tax at the standard rate from personal receipts of dividends, at the time the dividends are received. Any payments of surtax are entered when the surtax is paid.

note (1) page 20 It has been suggested that, since the second-hand value of a car tends to move down in steps with the year of its registration, new car purchasers have come to realise that— from the point of view of preserving the second-hand value —January is the best month for buying a car.