- Growth in the major overseas economies was particularly strong in the third quarter of last year, before the stock market fall. World interest rates have been further reduced, and business confidence appears to be holding up.
- World trade growth recovered in the second half of last year, although little progress was made in reducing trade imbalances among the three largest economies.
- The dollar has come under further downward pressure, and the authorities of the seven major industrial countries have reaffirmed their commitment to policy co-ordination and stable exchange rates.
- In the United Kingdom, output and productivity growth have fallen a little from the exceptionally high rates seen in the third quarter of last year but remain buoyant.
- Unit labour cost increases were very low in the third quarter and profitability again improved.
- Consumption has grown strongly, with the personal saving ratio falling to a very low level. Despite improved supply performance, the strength of domestic demand has led to a deteriorating current account.
Published on
01 March 1988
Economic commentary