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Published online by Cambridge University Press: 26 March 2020
Final sales have been rising relatively fast since the beginning of the year, but for a time the effect on the level of output has apparently been offset by reduced stock accumulation. Now, output is probably starting to rise again and it seems likely to continue to increase. The only substantial adjustment to the broad predictions for overall demand made in the January issue of the Review is that prospects for consumers' expenditure now suggest bigger increases than were then expected. It is unlikely that the economy as a whole will be running at the limits of capacity in the rest of this year, but there may be increasing strains in some sectors. The central problem of policy is likely still to be the discouraging outlook for the balance of payments.
(1) Defined as total expenditure minus net additions to stocks.
(1) One of the surprising features of the new statistics is that in 1958 to 1960, when inward portfolio investment was generally believed to be rising, the item which includes such portfolio investment as can be identified was declining. This suggests that the balancing item may contain a substantial amount of ‘long-term’ investment in securities in Britain.
(1) This takes into account the seasonal adjustments suggested on page 42.
(1) The Ford deal will enter into the first quarter figures as a long-term capital inflow but this is merely a book-keeping transaction; the funds actually came into Britain last year but were then recorded as an increase in sterling balances.