• Unbalanced Trade
• THE alarmingly large bill—£375 million—for imports in May following the unsatisfactory trade figures in April has now brought fears about the economic situation out into the open. We are importing 11 per cent, more than a year ago, but exporting only 6 per cent. more. Unless these large imports are being used to complete extra export orders the British economy is once more moving into the red. It may be that we shall see a great leap forward in the export trade shortly; one can only wait and hope. What is already clear is that the home market is very strong and quite capable of holding back goods which ought to go overseas. The public spent about 7 per cent, more in the shops during the first- 'few months of this year, that is, before the latest round of wage in- creases. Business in cars, radios, television sets and household appliances is flourishing. All in all, there is every sign that inflation is again gaining ground. It is to be hoped that this time the Treas- ury is on the alert.
It will in any case be difficult to defend the pound during the next few months. We scraped the barrel last December to borrow everything we could. Now we enter the lean season for the gold reserves with sterling commodity prices very weak. Further, the Indian fiasco continues. In a little over a year India has overspent to the tune of £410 million. About £340 million have been thrown on to the foreign exchange markets from her sterling balances, thus exerting a steady pres- sure against the sterling exchange rate. This bur- den on the sterling area will be with us for many months yet, since far from halting the outflow the Indian Government has been unable to prevent it from gathering speed. No doubt the authorities here have used their influence with the Indian Government. Certainly representatives from other sterling countries will want to add their own com- ments at the forthcoming Commonwealth Con- ference. The defence of sterling in the coming months will now no doubt have to be the first preoccupation of delegates to that conference.
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