^{note (1) page 4} Compared to our previous forecast, our present one shows, on the one hand, a slower rise in output from the beginning to the end of 1965; on the other hand, not as much flattening-off during 1966.

^{note (2) page 4} Here, only changes in recent quarters are discussed. October is the month in which revised quarterly national income figures are issued, stretching back to 1955. There has been an upward revision in the trend of consumers' expenditure and in the figures for factor incomes, and also a slight upward revision in consumer prices.

^{note (3) page 4} This is the movement of the ‘compromise’ estimate of national product. The expenditure estimate shows a bigger fall than this.

^{note (4) page 4} The evidence from the figures of bank clearings is also against any more substantial recovery than this. See National Institute Economic Review No. 33, August 1965, footnote (2), page 4.

^{note (5) page 4} ‘Some of the results of the industrial surveys of the Federation of British Industries compared with official statistics’, Economic Trends No. 143, September 1965, HMSO, page xxxi.

^{note (1) page 6} The National Plan, table 18.1, page 178.

^{note (1) page 9} The high first quarter and low second quarter figures are probably statistical; some expenditure may have been recorded early, since the Corporation tax reduced the value of investment allowances on expenditure incurred after 31st March. See National Institute Economic Review No. 33, August 1965, page 4.

^{note (2) page 9} The balance of those who expected to authorise more capital expenditure in the next twelve months, over those who expected to authorise less, was + 3 in October 1965, compared to —11 in October 1961, for plant and machinery; and — 15 in October 1965, compared to — 25 in October 1961, for building.

^{note (1) page 11} We would like to thank the managing directors con cerned, who were most helpful in answering our questions.

^{note (2) page 11} The National Plan, HMSO London, September 1965, table 18.2, page 180.

^{note (1) page 12} Recorded employment in September was lower than a year earlier; but it seems virtually certain that there will be a big upward revision to the figures.

^{note (2) page 12} The corresponding rise in the retail price index is about 3 per cent.

^{note (3) page 12} The total figures for consumers' expenditure, given in table 1, have been adjusted in order to arrive at a fully reconciled set of national accounts (see footnote (a), table 1). These adjustments have not been carried through to the individual items of consumers' expenditure; so the total given here, in the discussion of the pattern of expenditure differs a little from that in table 1, page 5.

^{note (1) page 16} W. A. H. Godley and J. R. Shepherd,’ Long-term growth and short-term policy’, National Institute Economic Review No. 29, August 1964, page 26. The equations have been recalculated using the revised figures for national output derived from Economic Trends, October 1965.

^{note (2) page 16} In the first eight months of 1965, actual hours worked by operatives in manufacturing industry were just over 1 per cent lower than in the same period of 1964.

^{note (1) page 17} From the third quarter of 1964 to the third quarter of 1965, our employment estimate (calculated from the movement of output) rises 112 thousand. Some 80 thousand of this ought to have come from the increase in the labour supply. Normally, of the remaining 32 thousand, only two-fifths would come from the unemployed. In fact over this period unemployment fell 37 thousand.

^{note (2) page 17} This is the percentage including school-leavers and temporarily stopped.

^{note (3) page 17} ‘Arithmetic of the long-term balance of payments problem’, National Institute Economic Review No. 33, August 1965, page 18.

^{note (4) page 17} The National Plan assumes that, from 1964 to 1970 the import volume of goods rises no faster than national output, whereas from 1954 to 1964 it rose 1.7 times as fast. The Plan also requires an acceleration in the annual rise in export volume from an historical 3 per cent to 5 1/4 per cent.

^{note (5) page 17} There was probably a small unidentified outflow, since the balancing item, which in an average year seems to be something like + £70 million, was negligible over this two- year period. But part of any net outflow will have repre sented an increase in the amount of net trade credit out standing, which must be expected to go on rising.

^{note (1) page 18} The recent French example also suggests that the incentive to productive investment is reduced in such conditions.