While the generals on the other side of the world were preparing their coup defoudre the Treasury, as is its custom when the minds of less high-thinking citizens have turned to winter sports, was considering what to put in Sir Geoffrey Howe’s fourth Budget. Some things were looking a good deal more propitious. After the precipitous rise in US interest rates in the late summer of 1981, and the subsequent two-fold upwards adjustment to London rates, the cost of money was beginning to ease once more. Contrary to most predictions (including the Treasury’s own) inflation had only risen by 1 per cent to 12 per cent in the autumn, and was soon expected to resume its descent; and 1981 had produced an all-time record current account payments surplus of £6000m. This had no doubt reflected the severity of the recession; but exports of manufactures had held up in the face of all the warnings by manufacturers of imminent withdrawal from their foreign markets. Government borrowing was forecast to be almost spot on the Budget-time forecast of £ l0½bn.
KeywordsIncome Marketing Explosive Petrol Volatility
Unable to display preview. Download preview PDF.