In our view, the effect of the July measures will not be such as to produce an actual recession-a drop in national output-in 1967. The forecast at the centre of probability is still for a fractional rise in total output ; this would be consonant with a small fall in industrial production. There are still some expansionary forces in the economy-exports (for we expect no great slowing down in the rise in world trade) and public sector expenditure generally : public authorities' current expenditure, public sector housing and other public investment programmes. These will probably be strong enough to balance a decline in private investment (including private housing). Our tentative forecast is that manufacturing investment will be 6 per cent lower in 1967 than in 1966 ; this is a smaller fall than in 1962 or 1963. But, although the size of the fall is central to the discussion of the possible long-term growth rate, it is not a key element in the short-term forecast, since manufacturing investment is less than a quarter of total investment. Even if it were to fall as fast as in 1962, this would not substantially alter the prospect for national output in the year 1967.