Recent trends and the future
With inflation below 10%, the balance of trade set on an improving trend and North Sea oil starting to flow, the financial economy at the beginning of 1978 was in a healthier state than at any time since early 1972. It seemed that interest rates might at last be freed from artificial manipulation in support of sterling, and that the independence provided by North Sea oil would enable the government to turn its attention to the problem of unemployment and the ‘real’ economy. In recognition of the economic improvement, and doubtless with an eye to a general election, the government provided a series of boosts to the economy culminating in substantial cuts in personal taxation.
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