This commentary takes a longer view than usual, setting the latest developments in the context of recent years-broadly, since the first sharp increase in oil prices in late 1973.
The commentary begins with a summary of world economic developments: policies to reduce inflation are meeting a good measure of success, but prospects for recovery of activity are uncertain. This is followed by an account of the main developments in the UK economy: trade flows, influenced by the economic cycle and changes in cost competitiveness; an easing of inflation; industrial costs increasing very modestly; and recession deeper than elsewhere, despite some hesitant recovery. As often in recession, the share of profits in national income was, until recently, falling, in favour of income from employment.
Where possible, the analysis relates financial aspects of personal and company behaviour to developments in the economy. Two complementary notes - on profitability and company finance and inflation-adjusted saving and its sectoral composition - appear later in this Bulletin.
Published on
01 June 1982
Economic commentary