The British economy [February 1986]

Growth in the UK economy looks set to continue in 1986 although at a lower rate than in preceding years. Consumer expenditure will play a dominant role in determining growth while exports and investment will expand less rapidly than in 1985. In the November Statement the Chancellor forecast further reductions in the inflation rate and reductions in income tax in the Spring Budget. Unlike previous years, however, the Chancellor provided no clear indication of the likely scale of tax cuts. Avoidance of any specific commitment has now been proven wise as the Exchequer's revenues have been reduced by falling oil prices.