Economic commentary

Quarterly Bulletin 1985 Q4
Published on 01 December 1985
  • Growth in the major overseas economies is recovering after faltering in the first half of this year.
  • With many commodity prices falling, and labour costs continuing to rise only slowly, inflation in the major overseas economies remains on a downward trend.
  • The dollar's exchange rate has fallen further since agreement was reached among the authorities of five major industrial economies that it should better reflect fundamental economic conditions.
  • At home there are some signs that the economy has been expanding more slowly. Consumption has continued to grow, but investment, after a temporary surge in the first quarter, was little changed in the third, and the real trade balance deteriorated.
  • The growth of UK labour costs has accelerated, but import prices have fallen, and retail prices have risen more slowly. Company profitability improved in the first half of the year.
  • Liquidity in the economy continues to grow more rapidly than nominal GDP.

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