* * * * BRITAIN'S BALANCE OF PAYMENTS
The huge rise in last year's imports already made apparent in the monthly figures had prepared the City for an adverse balance of payments and I see no cause for alarm now that the Board of Trade experts disclose a deficit of £52,000,000. The Board's calculations are no more than estimates but they are probably correct within about L25,0oo,000 ; at the worst, therefore, the deficit could scarcely have exceeded L75,0oo,000, even on the assumption that all the errors occurred on one side. The inference is, of course, that Britain was really living on its fat to a modest extent last year, a process which could not continue indefinitely but which seems to me to be fairly innocuous just now and again.
After all, the sharp rise of £86,000,000 in our adverse physical balance last year must be attributed almost entirely to heavy buying of materials, such as non-ferrous metals, rubber, timber and specialised types of machinery, necessi- tated by a large-scale programme of rearmament and in- dustrial re-equipment. So far as the pound sterling is concerned, the adverse balance means very little in current conditions of the exchange market. The steady rise in the gold resources of the country leaves no room for doubt that the money tides have been flowing very strongly towards these shores.
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