FINANCE AND INVESTMENT
By " CUSTOS "
IT is tempting just now to say that the Budget shadow is stealing across the stock markets. So it is, but it is no .ise pretending that this is the only or the chief reason «hr markets are quiet. Everybody now realises that the %.ar has entered a grimmer phase both in the military and he economic sense, and in the new atmosphere even the m )re bold investors and speculators must be expected to tread warily. I am not suggesting that markets are facing the prospect of any substantial volume of selling—I tried to explain last week why that is unlikely—but the odds are certainly in favour of a quiet period in which prices may drift down to rather lower levels. Budget forecasting is an unprofitable occupation. Just where the new burdens will be laid it is impossible to tell, but it is apparent that the Chancellor will have to impose a substantial addition to existing taxation. However the money is raised, the broad effect, combined with the gradual extension of rationing, must be to restrict public spending power and that means reduced earnings for a wide range of industries. On the other hand, it is possible that some shares will gain if, as seems likely, the Chancellor sees fit to amend the Excess Profits Tax on the lines suggested in the City. This would bring worthwhile benefits to the ordinary shares of many companies which were abnormally depressed or in the development stage in the " standard" years.
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