ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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UNITED KINGDOM- Monetarism and Decline

April 6, 1985 UNITED KINGDOM Monetarism and Decline Michael Jacobs THE Budget presented by the British Chancellor of the Exchequer, Nigel Lawson, last week was, he. claimed, "a Budget for jobs and enterprise". In practice its combination of minor tax adjustments and continuing financial restraint will do little for either, though the City money markets expressed their pleasure at its austerity by marking up the pound to $ 1.18, speculators taking healthy profits in the process. (Only a month before, sterling had slid very close to parity with the dollar.) Despite the rise in the pound, British interest rates remain at a 60-year record real level, at 13.5 per cent. Mortgage rates have just been put up again, maintaining the upward pressure on inflation, now running at an annual rate of 5.4 per cent. Meanwhile unemployment is also at an all-time high: 3.3 million people, or 1 in 7 of the workforce, is now out of work, and the number is still rising. The Budget will do nothing to reverse these trends, or indeed the continuing decline of the British economy as a whole which they indicate.

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