TNAG-1393-FCO40-1865-Future-of-Hong-Kong-briefing-for-meetings-and-visits-1985 — Page 63

·h an alı

1structi

pancial Strategy

poncial

Overseas borrowing and overseas assets.

at end 1984

Net UK assets overseas estimated at £74bn

equivalent to some 23 per cent of GDP - the highest percentage since 1945

and well up on 6 per cent in 1979. Valuable nest egg made possible in part by North Sea oil

benefits to balance of payments and by abolition of exchange controls.

Inflation

Average inflation through 1983 and 1984 was under 5 per cent the best performance since 1967 and 1968. Prices of goods bought by manufacturing down slightly in year to August -the best performance since March 1978. Import prices fell in July for fourth

successive month. CBI Trends Enquiry for August indicated that balance of firms expecting

to raise prices was around lowest since enquiry began in 1975.

Company Sector

Non-North Sea Industrial and commercial company pre tax profits (net of stock

appreciation) up almost 25 per cent in 1984.

Net real rate of return for all ICC's rose to 12 per cent in 1984, the highest level ever

recorded. On manufacturing it rose to 7 per cent - the highest level since 1973. On

non-North Sea activities it also rose to around 7 per cent the highest level since 1978 and

more than double the 1981 level.

Healthy rate of business start ups - In the five years 1980-1984 there was a net surplus

of 140,000 businesses registering for VAT equivalent to nearly 550 a week. In first half of 1985 new company registrations up 10 per cent of first half 1984 and 1985 all set to beat

1984's record level of nearly 100,000.

Labour Market, Productivity

Since Spring 1983, UK employed labour force has risen around 650,000. By contrast

total employment has fallen in the rest of the European Community over the same period.

Service employment at 13 million now at all time high.

UK has one of the highest proportions of people in work amongst all the major

countries and is well above the European average. [In 1983 65 per cent of UK population of

working age in employment compared with 59 per cent in EC.]

Special CBI Survey published last November points to increased number of jobs in next 5 years, particularly in services and small to medium sized firms. CBI expect around 400,000 new jobs by end 1986 - an increase of one million since spring 1983.