Britain: Maybe a Surplus– Some Time?

At long last, the British balance of trade deficit is showing substantial improvement. Almost everyone was pleasantly surprised last week when the Board of Trade announced the August totals of imports and exports. Exports rose $70 million to $1.33 billion. Imports, under the government’s austerity program, have decreased from $1.58 bil lion to $1.56 billion since July. The deficit, therefore, was a mere $229 million, the best Britain has done in 14 months.

Crossbows and Coffins. The rise in exports can be largely attributed to the fact that last November’s devaluation of the pound is finally taking effect. Meanwhile, major industries, with help from the government, are also making serious efforts to increase their export trade, and small businessmen are trying harder than ever to sell abroad. One delegation of small traders arriving in the U.S. recently included a dealer in crossbows equipped with telescopic sights, manufacturers of sedan chairs and stagecoaches, and a promoter from Surrey who maintains that he can provide “the most distinguished casket since Shakespeare’s day.” For prospective buyers in no hurry to take delivery, he says that he will also provide a suitable coat of arms on the casket.

One month’s figures, the Board of Trade warned, does not mean the end of a situation that only a week earlier had sent the British to Basel to arrange another $2 billion in credits from friendly central bankers (TIME, Sept. 20). Indeed, the board last week pointed out that some of the August increase in exports resulted from an “erratic” jump in diamond shipments. Nevertheless the figures, coupled with those of earlier months, do indicate a trend of sorts. Exports from June to August as a whole are 5% above those of March, April and May. Said London’s Financial Times: “We may be moving towards first a balance and then a surplus in our foreign payments.” With August’s encouraging figures on hand, the Bank of England last week sought to speed up that movement by dropping the bank rate another one-half of 1% to 7½%.