This appraisal of the economic situation was prepared before the Chancellor's measures announced on 25 July. The effects of these measures, and the modifications to the economic prospects for demand, are discussed on pages 15 and 16.

The unemployment and vacancy figures suggest that labour is scarcer than at any time since 1957; and in June the FBI Inquiry showed a sharp increase in the number of employers who reported that they found labour more difficult to get than four months earlier (chart 1). This note looks at past and prospective trends in the supply of labour, in particular at the importance of the bulge in birth-rates after the war, the tendency for more women to join the labour force, and the significance of migration.

Since the war the economies of some developed countries appear to have been growing exceptionally fast (table 1, chart 1). From 1950 onwards six countries have shown growth rates of 3 to 6 per cent; four of these have shown rates of over 3 per cent since 1954, by which time the effects of post-war recovery might be expected to have been over. These rates are nearly all more than twice as high as the long-term averages of the countries concerned. Does this imply that they are some kind of spurt rates which will inevitably revert, sooner or later, to more ‘normal’ rates of growth?