It is increasingly clear that the United Kingdom economy is moving into a difficult period. The levelling out of production has continued: output and demand ceased to expand during the summer. An abnormally large part of output seems still to have been going into stock accumulation. When this stops, as is likely, output may well fall for a time. Even apart from this possibility, demand cannot be expected to regain its former expansiveness for some time. The Government's freedom to redress the internal balance of the economy is hampered in the short term by the weak balance of payments position, largely arising from our poor export performance. Nor is the world situation likely to make things easier for Britain: world markets are expanding much more slowly than last year.

The table, which shows hypothetical calculation of total fuel and coal consumption in 1965 and 1970 (table 11, page 37), has been revised and improved in the light of comments, and also corrected for an arithmetic error in the calculation of the ‘3 per cent rise in GDP’ columns.

This article looks at the likely future trends in home demand for four major electrical appliances—television sets, refrigerators, washing-machines and vacuum cleaners. The sales of all four have risen fast in the last decade (table 1, chart 1)—by an average of 16.5 per cent a year, taking all four together, compared with 2.2 per cent for total consumer demand.

Britain's visible deficit in her balance of payments—that is, her deficit on imports and exports of goods—is likely to be a good deal worse this year than it was last: probably over £100 million bigger. But, even so, it is unlikely to be any larger than in the first half of the nineteen-fifties. This deterioration in visible trade would be much less disturbing if it were not for the fact that the ‘invisible’ balance has also been getting worse.