HEADWAY AT LAST
D R1TAIN is at last making real headway towards restor- 13 ing her international trading position. The progress of both exports and imports in July was reassuring, since it is clear that the more favourable trends are well established, and are not merely temporary. Exports continue to hold up well, at about 10 per cent. above last year's level. This strength is remarkable when it is remembered that the important Australian market is severely restricted for British business- men, and also that British motor-cars are out of fashion in Europe just now. The considerable increase in exports to North America is very welcome. Perhaps the various 'dollar drives' mounted by successive Governments have not been completely in vain. The imports bill is being trimmed, too, so that the trade gap, which last year was running at over £70 million per month, is down to under £50 million. This is quite manageable, since we can pay for it by other ways of earning foreign exchange, such as shipping, insurance and, most impor- tant of all, oil. Of course, if the Suez dispute eventually leads to a fall in the earnings of British oil companies operating in the Middle East, then the whole picture would look very different. But if this is avoided, then the surplus of £100 million in the balance of payments in the first half of this year may well be repeated in the current six months. All the same there is still plenty to worry about. This improvement itself necessarily adds to the pressures of inflation at home, and the Government has not yet convinced anyone that it is the master of the situation here. Most of all it has to convince foreign opinion that all is well, and that the further rise in the wage bill which now seems likely this autumn will really be earned by a dramatic increase in production.
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