^{page 5 note (1)} These figures are for the output estimate of GDP. The average estimate shows larger increases: 2 per cent for the earlier period and 3½ per cent for the later.

^{page 6 note (1)} Perhaps the closest parallel which can be found is the pre- announced ending on 31 December 1968 of temporarily higher rates of investment grants. The CSO estimated that about 10 per cent of the investment by manufacturing industry which would otherwise have taken place in the first quarter of 1969 was shifted forward into the previous quarter.

^{page 6 note (2)} The speeding up of VAT payments on imports may also have some temporary effect on prices, but in our forecast we assume it is negligible.

^{page 8 note (1)} It was pointed out in the February Review (p.22) that the seasonal pattern of consumer spending may have changed in recent years. The official adjustments have now been revised, which has had the effect of reducing by a little more than ½ per cent the estimated rise in spending in the fourth quarter of last year. The estimated level of spending in 1983 as a whole has been revised up slightly however.

^{page 10 note (1)} The GDP deflator may understate the rise in the price of this component of expenditure because of the rapidly rising cost of defence procurement.

^{page 10 note (2)} The White Paper provides for a reserve of £2,750 million in 1984/5, which is almost double the provision for 1983/4 in last year‘s White Paper. This year's White Paper also differs from last year's in not making a separate allowance for general shortfall and in introducing a special allowance (£735 million in 1984/5) for local authority overspending on current account. These changes have increased the net provision for unplanned expenditure to £3½ billion, from only £300 million in the last financial year.

^{page 11 note (1)} A short-term interest rate (inverted) is included in the CSO's list of longer leading indicators.

^{page 13 note (1)} The increase on the National Accounts definition, which ex cludes leasing, may be smaller than this. Although in the longer term the tax advantages of leasing will be much reduced by the Budget changes, there is likely to be an increase in the volume of leasing in the immediate future as lessors and lessees seek to take advantage of first year and initial allowances before they disappear altogether.

^{page 13 note (2)} The coverage of the DTI survey, which includes construction, is broader than that of distribution, financial and business services in table 9.

^{page 13 note (3)} From next year annual investment allowances will be given immediately expenditure is incurred, and not, as at present, when assets are brought into use. This will bring forward the entitlement to allowances for those assets, such as oil rigs and ships, for which payments are normally made well in advance.

^{page 13 note (4)} This is not so for ‘dwellings’ however, the series for which relate to new investment, gross of sales of land and existing buildings.

^{page 15 note (1)} Same-period-of-a-year-ago comparisons (while frequently used to eliminate seasonality and erratic fluctuations in monthly or quarterly series) are a misleading guide to recent trends in retail prices. The apparent acceleration since the second quarter of last year is, in fact, a reflection of the profile of sharply decelerating prices over the preceding year. The rate of increase, quarter on previous quarter, has declined continuously. It was only 0.6 per cent in the first quarter, which includes an actual fall in the index in January due to lower prices in the New Year sales.

^{page 16 note (1)} This is because costs are accelerating, which because of lags does not produce an immediate, fully proportionate, increase in prices. The equation for the consumer price index used for this forecast has longer lags, particularly with respect to import prices, than the one used for our last forecast in February. It is this change to the properties of our forecasting model, rather than any change of view about movements in costs, which is responsible for a slightly lower forecast of inflation for this year.

^{page 17 note (1)} See footnote (a) to table 13. An additional indication that part of the increase in employment has come from unregistered unemployment is that recorded female employment, particularly of part-timers, has risen proportionately more than recorded male employment.

^{page 19 note (1)} The 1984/5 targets apply to the annual rates of growth over the fourteen banking months from February 1984 to April 1985.

^{page 19 note (2)} This is true of our own research, and also that at the Bank of England (see Bank of England Quarterly Bulletin, December 1982, pp. 527-29).

^{page 19 note (3)} This visual impression is confirmed by a regression of the velocity of M0 on the velocity of £M3 and a time trend. The estimated coefficient on the velocity of £M3 is negative (though not quite significantly different from zero at the 95 per cent level).

^{page 20 note (1)} Economic Trends, April 1984, pp. 71-74.