The British economy [March 1988]

Growth in the British economy continues at a high rate. To date there is little evidence that the collapse of share prices in October has had much effect on consumer demand or on business confidence. The expected decline in the UK growth rate during 1988 is likely to prevent any occurence of the symptoms of overheating which were evident before the events of last October. Further significant deterioration in the balance of payments is to be expected this year. The size of the deterioration and the extent of downward pressure on the exchange rate will in part depend on the degree to which the economy can contain incipient cost inflationary pressures