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Published online by Cambridge University Press: 26 March 2020
During the first half of 1961, real output and expenditure were rising at a rate of about 3–4 per cent per annum and in the absence of the Chancellor's restrictive measures in July, much the same rate of expansion would have been likely to continue through the rest of the year. It now seems that the growth of demand and output will slow down and probably level out for a time. The balance of payments continues in overall deficit, but was improving considerably before the Chancellor's measures were announced. The reason was a decline in imports, which has been sharper than we expected in earlier issues of the Review. The rate of exports has barely changed since the end of 1960. In the next twelve months conditions in export markets should be favourable and even though Britain's competitive position remains weak, there should be a rise in exports. Since a check to growth at home is likely to prevent imports from rising much, the overall balance may again show a surplus in the first half of 1962, for the first time since 1958.
(1) German exports, as adjusted for seasonal variation by the OEEC Secretariat, show somewhat irregular fluctuations in the first half of this year. The seasonally adjusted figures published by the Bundesbank show a steady, although slight, decline from December 1960 to June 1961.
(1) But for the large addition to copper stocks, there would have been a £10 million fall in stocks of imported industrial materials instead of the £4 million rise shown in table 6.