Tories' growth on the head

al c particularly team of examine and look the 'conFRIENDSHIP with Richard Nixon has been very much at the centre of discussion this week THE NOVEMBER economic review published by the National Institute for Economic and Social Research- takes issue with the Tory government's inflated forecast of a 5-percent growth rate and foresees a large balance of payments deficit next year.

The Treasury has claimed that the economy is 'growing' at the rate of 5 per cent per annum-an estimate based largely on the continuation of price inflation which artificially boosts the figure for the gross domestic product.

This was sharply pointed out hu Confaderation VULICUCIALUI UL MILLION of Rritich Industry president Michael Clapham in a speech to Tory backbenchers last week.

The Institute reports that even on the present inflationary basis, production is lagging behind the Tories' estimates. It says that at present rates, the economy is growing at only 4 per cent, and the figure is likely to fall to 34 per cent by next summer.

Its solution is to call for further stimulus'-that is, the Troops sent in to break dustmen's strike The CGT (Communist demonstration ended with a Party) leaders of striking mass-meeting in front of the Paris dustmen began town hall. negotiations yesterday with Jean Verdier, the Paris mainly immigrant workers, Prefect, who has sent in are demanding an end to troops to clear up the the 55-hour week they are streets of Paris (see working and better conabove) ditions. The reopening of negotiations was the main de- whose 20th Congress began mand La. thain NAT mana pur torwara by ine CGT on very militant demonstration of dustmen on Tuesday afternoon. The inflationary injection of more money into the economy. Yet the government has just raised the minimum Bank of England lending rate by ‡ per cent and the clearing banks have raised their lending rates to keep pace.

The low level of stocks of materials in industry could give a temporary fillip to the economy. but it will also mean a big increase in imports over the coming year. The Institute forecasts a £300m balance-ofpayments deficit for 1973.

It also says that if the government does 'stimulate' the economy to reach its planned 'growth' target, the trade deficit will be nearer £500m. The devaluation of the pound since July has increased import prices at a time when imports are increasing.

Nevertheless the Institute The strikers, who are The Communist Party, yesterday, and tell vul leadership has at no stage opposed the use of strike breaking troops. recommends that the pound continues floating until the expected upturn in exports gets under way. This will, of course, mean a further increase in import costs and put an added burden on the balance of payments.

The Institute stresses 1 extreme difficulty of foreca Isting economic trends in 1 PILOLLI situation. va nrecent citation The ha Isic 1010 problem, however, is that 1 classic methods of governmı ent regulation of the economy : no longer effective in a peri iod when the internatio nal monetary system has brok Ken down and a world trade war being waged.

This is the background the National Institute revie which sets out before the Tr ory government the equally pain iful alternatives of further inflat. ion or immediate recession.