The following extract from the Commentary in the September issue of the Quarterly Bulletin of the Bank of iingland paints a gloomy picture of Brivain's economic prospects in the immediate period and indicates that the Tories have far from resolved their difficulties.
",...Despite the continued expansion in continental ‘lestern Europe, the slower growth in North America and some restraints on activity in other industrial countries have limited total demand for primary commodities; and at the end of July prices of these commodities were still falling. Thus, although the volume of trade in them may have risen, the producing countries! incomes are unlikely to have benefited much. Among overseas sterling area countries, Austra~ lia and South Africa continue to have a strong balance of payments but some others notably India, still experience difficulties.
"The future course of world trade quite largely depends, as alwoys, upon the policies pursued by the main countries. At present there prevails some cont— rast betweer. the situations in North America on the one hand and in continental Western Gurope and Japan on the others; in the former, policy is having to meet problems of under-employment, while in the latter it is increasingly concerned with problems of rising costs. The very existence of this contrast suggests that the main disguilibrium in trade and payments is on the way to solutions but at the same time, and bearing in mind the weakness of primary commodity prices, it suggests some approaching restraint upon the growth of world trade, at a jeculiarly inopportune time for the United Kingdom, Speedy solutions to problems of under-employment, consistent with maintaining external strength, may not be easy to obtain if treatment elsewhere of rising costs were to prove very difficult without some restrictions of home demand. It is the task of international economic co-operation, highly developed as it is, to minimise any adverse change in the growth of world trades and if this task were made too difficult by doubts about the adequacy of exchange reserves and international credit facilities, it would be for international discussions to resolve them...." (our omphasis)