An August Damper
Fr HE overseas trade figures for August were I distinctly disappointing. It will be remem- bered that Mr. Selwyn Lloyd had been banking upon a substantial rise in exports to get the economy going. For the first four or five months of the year his optimism seemed to be justified. Exports had been slowly moving up since last autumn and in the second quarter of the year the figures, seasonally adjusted, were 41 per cent. up on the first quarter. But the August figures put a damper on hopes of any further improvement. Exports and re-exports fell from £340 milli" in July to £300 million in August. Seasonally adjusted exports in June, July and August were only 21 per cent. more than in the three months March, April and May, and the rate for the first eight months of the year was only 21 per cent. more than the average for 1961. Mr' Selwyn Lloyd had been anticipating a rise of at least 8 per cent. for the whole of 1962. It would be wrong to conclude too much from one or two months' figures, but as the Bank of England stated in its last Bulletin, the growth of international trade might slacken next year with the tailing-off of the American boom and the slowing-down of the European boom. Yet In view of the sluggishness of retail trade, a reflation of the economy is called for. Here is a problem for Mr. Maudling. If he reflates he will have to take the risk of temporarily higher imports ict the hope of higher exports later on then lower costs, through higher output, will have made British goods more competitive.
Mi gh f call is Europe. . . 7. In i101 were
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