In some important respects the situation in July 1962 was much better than it had been a year earlier. Confidence in sterling had been restored, the outflow of funds reversed, and the reserves were considerably higher. Exports had been rising for six months, but imports had been steady and the current balance had moved from deficit to surplus. The "pay pause" had helped to make the United Kingdom more competitive abroad. Bank Rate, which had been raised from 5% to 7% in July 1961, had since been reduced by stages to 41%. During the year too a start had been made with the long-term remedies which the weakness of 1961 had shown to be necessary; an incomes policy was being formulated and the National Economic Development Council had been set up. All these achievements had, however, not been without cost. Industrial output had grown very little over the year as a whole and, more serious for the future, there were now some indications that the long-term upward trend in fixed investment by manufacturing industry might not be maintained.