Financial Progress Report
The Chancellor of the Exchequer in his Mansion House speech on Tuesday achieved a just balance between congratu- lation concerning the past and warning of the difficulties ahead. When he first announced 010 the deficit in the balance of pay- ments would have to be wiped out before the end of 1952 he was not merely expressing a wish but stating a necessity. The object of the first economic drive by the new Government was not to establish the millennium but to ensure survival. The effect of the achievement of a surplus on overseas account during the first half of the year instead of in the course of the second half is therefore to clear the decks for the next and larger task, which is the consolidation of the favourable balance. Congratulation on the success of the Government's policy in getting Britain out of the dangerous waters, in which it was floundering a year ago must be given in passing. There can be no pause. It will not be easy to maintain even the precarious United Kingdom surplus of £24 million. The figures for the first six months of the year do not reflect to the full the difficulties being experienced by exporters. Means have to be found to meet the drain of interest payments to overseas countries, which are normally heavier in the second half of the year. Within the " overall balance there remains a dollar deficit which pretty certainly was still increasing in the first half of 1952. There is much to be done. But, with the main- tenance of the determined guidance and strong effort of the past year, there is at least a reasonable hope that the surplus already gained will not be wiped out again by the end of the year. But that hope rests to a very great extent on whatever success may be achieved in the controlled reduction of infla- tionary pressure at home.
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