Overseas Price-Movements

Financial Statement – in the House of Commons on 25th April 1944.

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The increased cost of domestic production is not, however, the whole explanation of the increased subsidies now being required to stabilise the cost of living. Some part of the explanation is to be found in the growing cost of imports, which affects particularly the food component of the index. It is one thing to subsidise prices in order to avoid the vicious spiral of inflation at home. It is another thing to use subsidies without restraint, so as to increase the gap between domestic prices and world prices. Such a policy, if pushed too far, might create very great difficulties for us after the war.