It still seems probable that the rise in output which can be expected in 1961 will be retarded for a while by reduced stock-building, in reaction to the heavy stock accumulation in 1960. Nevertheless, final demand is probably buoyant enough now to result in some expansion during the first half of 1961. British exports, which show signs of expanding rather faster than might have been expected, should benefit, of some extent later in the year from the revaluation to the German mark; but the balance of payments is likely to remain in substantial overall deficit—a situation the more serious after the heavy deficit of 1960. Budgetary policy is therefore unlikely (see page 14) to be expansionary.