The international accounts of the United Kingdom in 1951

 No. E 122 ~-~:-:-=-l 67045 ... ~ ~"' .. to' ~, , \ \ T~is report is not to be published nor may it ~e quoted as representing the Bank's views. <>f' ,~~,l ,0"'-1'>0-----· ~ ~ L~_- INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT THE INTERNATIONAL ACCOUNTS OF THE UNITED KINGDOM IN 1951 November 22. 1950 Economic Department Prepared by: John H. Adler Antonio Dore David Pollock  THE INTEHl'JA'1'ION.A.L ACCOUNTS or TIf~ mUTbD IUNGDC:~ HI ;L95l The present memorandum attempts to estimate how the international economic position of the United Kingdom will be affected in the shortrun by recent developments related to the defense efforts of the Uni ted States and other Atlantic Pact nationso This parer supplements the previous meeorandum on "The Effects of the U.S. Defense Effort on the International Accour;ts of the United States." It :Ls based on the same broad expectation that '!Ti thin next twelve months military expencli turcs of the Western nations VJill not increase, or at least will not substantially increase, beyond the limits set by present plans. 11.S far as possible, it also foll07.;8 the same pattern of analysis. It pertains to current account transactions only; no attempt has been made to forecast capital movements~ Overall - ,-- Results -- The major result of the estimG.ted chanc;es in the British inter- national accounts 'ld.ll be a pronounced deterioration of the terms of trade of the United Kinbdom. If the physical volu.'Ue of im[Jorts in the first six months of 19.50 is assumed to remain u..'lchanged, the projected increases of import prices raj.se the value of annual imports by £340 million. If export prices increase 10% as they may well. do for reasons set forth oelo,r." the in- creased lIimport bill ll is offset, in part, by increased export prOCe(3d.s; but the net cost of the worsening of the British terms of trade would still amount to tlll million. If the volu,"Tle of U.K- imports increases by 5%, the value of im- ports ,till increase by apI_,roximately 1:480 million over the annual rate of i·ll- ports in the first six months of 1950. The assuTIlj,ltion of a 5% increase in  -2- the volume of im1Jorts appears plausible in view of the extraordinary curtailrnen t. of dollar imports in the second half of 1949. With the ex- pected rise of economic activity an expansion of i.rnports of that pror;orti on appears unavoiaable. In order to bring the U...K. trade deficj t back to the level of t.'1e first six months of 1950, an 11% increase in the vo1lL'11e of ex- ports would be necessary_ The possibility of s'J.ch an increase appears rather The results of the various assUIDr.tions are shown in estif'la tes fl., B, C and D in the accompanying tables 0 T~ey are supplemented by an esti,:1ate of the eX}J8ctecJ. mOV8lilents in Great Britain's invisible accounts .. Tte net surplus on service account in 1951 has been tente.tively placed bet,','ee~ 1:330 million and 1:350 mi.llion, approximately three tines higLer than the total for 1949 and slightly above the annual rate for the first six months of 1950. It should be emphasized at once that the projections do not gi va any indication of the expected balance of 'pa~nnents position of the sterling area as a whole. As indicated in the previous paper on the international accounts of tl1e United states,.. it apI;ears likely that the sterEng area as a whole, unlike the U.K .. , \Ciill develop a very s'ubstantial dollar sarplus, i.e. thdt the current accumulation of gold and dollar baL:nces will continue althouGh perhaps at a declining rate, for so'ne time .. The main conclusion to be dralim is that with the dollar problem of the sterling area temporarily "solved" through the hi<sh level of t;1e dol- lar earni.ngs of its overseas members, t:18 >rospects of growi-'6 sterli'lg bal- ances, or, alternativel;;r" of expanded Sritj.sh eXlJOrts to the sterlinL area, '\  -3- become the main problem besettin€, the international accounts of the United Kingdom. Thus, the British balance of payments problem becomes primarily a Itsterling't or rather a "sterling area problem." The major limitation of the quantitative appraisals contai.l1ed in the present study is that they apply for the next twelve or fifteen months only; uncertainties regardin", the volume of armaments eXflendi tures by the Bri tish Government, its quantitative relation to military aiel from the United States, and the impact of the armaments program on the British econ,;:ny, mar any attempts to forecast developments beyond the end of 1951. Specific Assumptions and Pattern of i Analysis All projections of the U.K. fOleign transactions have been based on the assumptions that (a) raw material prices will, in general, settle at the levels reached by the end of July 1950; and (b) the U.K. wholesale price level will be 12% above the average level reached during the first six months of 1950. This assumption is based partly on the effect on thE' wholesale price level of the increased prices of imports, especially raw materials, which should lead to a .i:~'rice increase of about 5%, and partly on the ex- pectation of wa6e increases of about 5%. The folloVi'iniS factors have been affecting and will continue to affect the international economic position of the U.K,: (a) The devaluations and import restrictions of 1949. These can be presumed to have shown already their main effects on the international trade of the U.K., but SOl!1e delayed increase of export prices may still be expected:  -4- (b) The raw materials boom which occurred during the first half of 1950 and the sharp price increases of certain corr~odities after the outbreak of the Korean war; and (c) The current British export drive g In the following paragraphs a detailed account is gj_ven of the techniques used and results obtained in projecting the U.K. trade and ser- vice accou:''1ts~ A. Projections of Merchandise Imports In order to obtain a measure of the effec-ts of recent pr~_ce C:langes-, i.'1lports of 19 commodities, representing about 40% of the total U.. K. import value in 1949, have been a'nalyzed on an individual basis e The remainder of imports has been dealt v;.rJ. th in abGregate terms. The proj ection of the imports of the individual commodities was obtained by revaluing the im,r:ort values of the first six months of 1950 by the same percentage change as occurred in spot market quotations of the speci:::ic commodity between the first six months of 1950 (average) and August 1, 1950. In general, the change in spot price quotations gives an advance indication of the more delayed ch8.ngp.s which occur in unit values of imports. In certain instances appropriat,e modi- fications of this method have been made,]j since the movements cf c10mestic prices, especially of foodstuffs, are not representative of the changes of prices paid by importers because of the prevailing system of fixed prices, controls and subsidies. In the main, however, even t..l)Ot',gh the projection for single commodities might be distorted by chan~ing subsidy allocc"tions, Y See "remarks" in table 2  -5- it can be presumed that fer all subsidized commodities the change tn U.K. domestic prices will not be out of proportion with the change of import. prices¥ For commodities dealt 1,vith in a6bregate terms (60% of total imports), the assumption of a 9% price increase over the average of Januar;/-June 19$0 2/ was considered appropriate.- In 'fTotal A, II table 3, only the effects of pdce changes are con- sid€red; the import volmne is assumed to be constant on tn.:::; level of the first six months of 1950. Appropriate adjustments have been made, hO;Never, for the analyzed commodities, whenever voluIne figurE'S for Janua:ry-,Tune do not appear representative of the annual average, because of seasonal distortions, bulk pu.rchases, or other reasons. The results under lITota1 A" show import ,ralues at E2,897 million, represEmting a 13% increase (E340 million) over the first six months of 19$0. "Total BII in the same table tal<;:es into account a 5% quantity in- crease as well as price cha~ges. Under this ass 1:unption the C.I.:<'. 'Talue of total imports increases to E.3,042 million, or £484 million over the first six months of 1950. The S% increase in the voll.:une of imports is assumed to occur as a result of the expansion of industrial prod',lction because of' armaments expenditures, in consequence of the normal 5e cular grolirth, and because, as inc1icated above, a relaxation of the import restrictions itnposed in 1949 is Ukely. In line nith the ass'Jmptions of the previ')us me'rlOrandum regarding U.S. exports, it has been assumed that the volume of (T.Te. imports YThe UoK. budgets a specific annual appropriation to cover all sub:;;idies~ 11. larger allocation of subsidies for one commodity therefore must resujJi in a smaller subsidy for others. Therefore, increases in import prices must ultimately be more or lessfully reflected in donestic prices, unl8ss the amount of total SUJsid1.:c;s is changed 01' a change in the proportion of subsidies allocated for imported and donestically produced goods occurs. '!ISee "remarkslf for Itall other imports" in table 2.  -6- from the dollar area, aside from. shipments tLTlder the Hili tary Aid f'rogram, will not increase; therefore, the overall 5% volume increase was distr:ibl1ted between all geographical subdivisions except the dollar area, on t~·)e basts of the pattern prevailing in 1949-50. The main results of the import projections are as follows: (1) During the first six months of 1950, the annual rate of the C.1.F. value of i.rnports was 12.6% higher, in terms of pound ster}.in[, than in 1949. By 1951 the value of total imports should show a furtr.er increase of 13%, as a consequence of price changes alone, and by 19% if both volu..rne and prices increase. (2) In 1949 and in the first six months of 1950, sterling area countries (including dependencies) P' ovided 31% and 39% of total imports, respectively. 1951 the value of irn~orts from these countries will increase by nearly one-fo~lrth over the first six months of 1950 ~~d thus account for nearly 41% of total U.K, imports-. The increased value of linports from non-dependent sterling area countries results primarily from higher prices of Australian and New Zealand wool. Imports from dependencies are expected t("l be 30% higher, in value, than in the first six months of 1950 primarily because of the large increase in t~e price of rubber imports from Malaya and of cocoa imports from the Gold Coast. (3) As a consequence of price changes alone, imports from the dollar area are likely to be 7% higher than in 1950 but  -7- their total value will still be 6% 10l'lrer than in 1949 in terms of sterling, and 26% in dollar terms. The 1951 distribution of imports among til:; iSrio'..ls countries of the dollar area is likely to differ substantially from that of 19h9.. British purchases fro::n Latin American dollar account countries are expected to rise substantially since these countries are n;.a.in1y exporters of raw materials and crude foods such as sugar, which since 1949 ha.ve experienced considerable price increases. Uoreover 1 these imports have been scarcely affected by the additiona.l import restrictions imposed in 1949; conve;rsely.. considerable controls presurra-oly will continue on imForts from Canada and the United States. (4) The increase in the value of purchases :fr'O:ll ether area.s( in- cluding EHP Europe) will be smaller than that from the sterl- ing area. The increase vall be larger than in the case of imports from the dollar area, especially if probable volume C11ane;es are included in the projections. B. Projections of rI~rchandlse Ex\..')qrts and T<.?~al Trade Accounts 1951 projections for U.K. exports have been dealt 'Yi tl'1 in agGregate terr:lS, since t.~e great diversity of manufactured exports and. the small proportion of commodities for 'Nhich spot quotations are a.vailZlc,le, make commodity-by-commodity projections impossible. It is assumed that the export price level will increase by 10% over the average of the first six months of 1950. A 10% increase of export prices is the seme aathe assumed increase of import prices for manufactured art:i.cles 1/ since U.E:. exports fall largely }/See "remarks" for all ~ther imjC'orts i~ table 2,  -8- into this category. This increase is smaller than that assumed for U.K. wholesale prices (12%) and the rise in import prices (13%): it is larger, however, than the rise in export prices between the sterling devaluation and the end of June 1950~ During that period import prices rose 21% while ex- pnrt prices increased only 8%. It is considered virtually impossible that this ratio of almost 3:1 can be maintained. The slow rise of export prices was partly due to the fact that at the time of devaluation larger ir.ventories, which had been purchased at lower prices, were available o These inventories have largely been utilized in the meantime; future exports lall have to re- flect more immediately increased costs of raw materials o The increase of domestic prices has in fact gained momentum in recent months; July data suggest that the increase in production costs is beginning to exert a stronger pressure on export prices. As to the volume of exports, several alternative projections are shown in table 4. The first projection (A) takes account of price changes only; the second projection (B) allows for price changes as well as a volume increase of 5%; and projection (C) indicates that it would take al- most an 11% increase in the volume of exp~rts to balance the overall trade accounts of the United Kingdom~ Hhether or not the volume of exports will increase depends on several factors. With the level of economic activity and money inceme in all markets for British exports rising, the demand for exports is bound to increase. The expected increase in export prices is not likely to dis- courage foreign countries from increasing their purchases so long as British prices remain co~petitive with those of other countries. As a matter of  -9- fact, the projected price increases may even improve the competitive position of British exports relative to those of the United States since America:! ex- port prices are likely to rise more than British prices D On the sl:J.;:ply side, hovJever, increased armaments expenditures are likely to affect adversely t.~e volume of goods available for export; as a result, scarcities and supply difficulties in certain lines of exports are to be expected. How the com- peting pressures of a rising e~:)ort demand and expanded armaments require- ments will be resolved, will, to some extent, depend on the attitude of tr:e sterling area countries, i.e. vihether or not they will permit furtter increase in their sterlint, balances in the face of inflationary pressures induced by the raw materials boom. In line with the previous memorandum on the C.S. Balance of pay- ments, it has been assumed that the volume of exports to the United States will not increase. Canada and other dollar account countries have been assumed to purchase a proportionately larger volume of goods from the U.K. in 19$1. In order to make the trade projecti on comrarable wi th the latest balance of payments data, 11 import fi[;<lres have been adjusted from a o.i.f. to a f.o.b. basis. Besides, oil imports from fu~erican oil co~panies in t~e Netherlands Antilles and in the Near East are tr,-ated as pa:llJlenLs to the Uni ted States. Further adjustments provide for SO:11e differences i:'1 cove'~age between the trade and the paJ'ments figllxes • .E/ lICmd. 806$, October 1950 E/The most im~ortant difference is the inclusion, in the balance of payments figures, of diamonds, silver and second-ha.'1d ships.  - 10 - In 1947, 1948, 1949 and the first six months of 1950 (annual rate), the U.K. trade deficit was ~ 425 million, ~ 207 million, ~ 147 million, and ~ 216 million, respectively. The present computation indicates that as a re- su1t of the expected changes in prices and a 5% volume increase for both ex- ports and imports, the trade deficit will rise in 1951 to some ~ 340 mi11ion.!/ It should be noted that this deficit is primarily the result of the projected price changeso If it is assumed that only the vo1UDe of imports increased while the level or exports remains constant, the trade deficit would increase to approximately ~ 450 million and would be even larger than the deficit of 191.+7}:./ Regardless of what assumption .:.s made, however, invisible transac- tions can be expected to offset, at least in part, the deficit on trade ac- count. C. PrC?jections of In7isibles and Current Account T~ The projections of invisible accounts for 1951 are based UpO!1 a set of assumptions lis ted in the Appendix. Government overseas transactions have been included in the service accounts in order to facilitate ccmpar:ison with balance of pa~nents estimates of earlier years. Earnings on shipping account have been forecast at a higher level than that prevailing in previous years, becaUSe an increase of revenues in both dry cargo freighting and passenger transportation is expected. Net int- erest, profits and dividends are also expected to increase over their 1949 levels, mainly because of the anticipated boom conditions in areas where British investments are concentrated. Deficits on gift and travel accounts seem likely to persist through 1951; the net total of these items should be 1/ Table 5, Estlinate c. g/ Table 5, Estimate B.  .... 11 - only slightly below the levels which prevailed in the first sjx mont,hs of 1950,. Earnings under the heading lIother (net)," heavily 'Yeighted by overseas transactions of British oil and insurance companies, are assumed to increase by some 25% over the 1950 tota1o The service accounts, excludin€;, government overseas expendj.tures, are expected to yield a gross surplus of more than J;, 500 million, compared to b 446 million in 1950 (annual rate of the fir$t six months)o After deduct- ing government expenditures, however, the net invisible account surplus is projected at b 332 million in 1951, as compared with J;, 320 million and b 109 million in 1950 (annual rate) and 1949 respectivelY~/ The combination of trade and service accounts in table 7 sho~:JS an approximate balance by 1951, if it is assumed that the volume of exports and imports increases by 5% over the first six months of 1950 (Estimate C)o A deficit of roughly J;, 120 million can, hO;Jevor, be expected if the volume of exports (Estimate B) does not increaseo Net receipts on invisible account will more than offset the estimated trade account deficit 'with the sterling area and partly offset that vvi th the dollar area and the "non-dollar Y'}estern Hemisphere;" they will also increase the surplus with Ol'',EC countries. Net invisible payments, on the other hand, will increase the deficit with Itother countries':)" Y In the projections of the service account, allowance has been made for the larger net earnings on shipping which would result ,from an expansion of the volume of trade (see note to table 8). In consequence, the sur- plus on service account vrould increase sli~htly.  - 12 - APFEfmIX Invisible Items in the U.~t:ed Kingdom Current Account Projections of United Kingdom invisible accounts are subject to a considerable margin of error for several reasons including (a) the difficulty of reconciling official balance of payments data with those appearing in other important reference sources; (b) the latest data are still provisional; and (c) several assum~tions may be strongly affected by non:-economic considera- tions.. i;Ioreover, errors are likely to occur in the two major headings IIgov- ernment transactions (net)," and lIother (net)" since they include such a variety of components as to make specifl.c projectjl"'l1s difficult~ If, fer example, the 1951 projection for the heading "other (net)" was to be increased by only a relatively small percentage, the 1951 surplus ~n invisible account, as sho"lm in table 8, would be appreciably altered .. On the basis of assumptions outlined below, service items in the UoK. balance of payments may be expected to yield a net amount of more than t 330 mil1iono This estimate compares with totals of b 320 million and I. 109 million net for 1950 (annual rate of first six months) and 1949, respectively. The geographical breakdown has been based in part on the area dis- tribution of the service accounts since the end of Viorld vial' II, vd,th the provisional figures for 1950 being considered a most likely indication of the 1951 regional allocation. Government Transactions (net): This heading is very heavily weighted by three sub-items, "military, II "administrative and diplomatic" and lI'war dis- posals o " Receipts frem the latter are assumed to decline steadily through 1951, while expenditures on the first two items are expected to riseo  - 13 - Political and especially military influences, however, could grea·l;.ly change the net total for this heading, as shown in table 8. Shippin~: The U.K. is expected to show higher earnings from direct and cross freighting and fran a grmving number of tourists. These factors, together wi th the rehabilita tion of dry cargo and passenger lines should reaul t in a continuation 0: the net shipping surplus of the past several years. Since direct shipping earnings are largely dependent on the volume of trade, four alternative projections, corresponding to the various trade projections, have been made. Interest, Profits and Dividen~: Estimates under this heading are conplicated by the lack of precise data showing the distribution of overseas investments as between d:i,rect investment and portfolio holdings. Net receipts closely ap- proximatir~ the 1950 (annual rate) level, 2nd some 35% hi6her than 1949 have been projected, since British investments are largest in those areas which are likely to benefit moat from the raw materials boom. No account has been taken of interest payments due December 31, 1951, on U.s. and Canadian Government credits. Travel: Both sides of the tourism accomnt are expected to increase throughout 1951" with the net deficit unlikely to show any significant change over the 1950 (annual rate) level. Migrants funds, ~egacie~,z l~rivate Gifts (net): The downward trend of the amounts sh~Nn under this classification is expected to continue. Other (net): This heading ~ombines such diverse items as direct investment  - 14 - income of certain U.K. shipping, insurance and oil companies, sales to home industry of non-monetary gold, commiss~ons, royalties, and net remittances in respect of films. It also includes offsets for items shmm elsewhere and an allowance for "errors and omissions" on current account. Overseas transac- tions of British oil companies (other than capital expenditures) strongly in- fluence the amounts appearing under this heading; since no information is available regarding the planned operation of oil companies, the net total shown in table 7 must be considered highly tentative.  . ,. TAI3LE 1 - page 2 Dependencies of Con- American ACCOUllj :Hon-Dollar ff:esjern Continental E.R.P. tinenta1 E.R.P. Coun- countri1s K Hemis~re ..1 Countries tries All Other Countries 1950 --1950 1J 1950 It 1950 'I7 195Q 11 1949 -L -1L 1951 1949 ~ -.1L 1951 1949 ..lL. 2- 1951 19!.j,9 .-:L .JL lQ5A 1Q4g -L -1L 1951 --" 1. \Yool 1 3 :3 4 5 8 8 13 2. vJheat 2 2 2 3. Cotton 17 11 16 20 ..) 3 l} 5 46 28 32 39 4. Butter 30 33 43 43 5. Tea 6. Sugar 33 31 33 37 7. Gasoline 2 8 8 8 6 6 6 20 20 20 21 10 12 12 13 8. Tobacco 5 6 5 5 9. Petroleum 1 2 2 2 1 1 1 1 5 8 8 8 15 28 28 28 10. Bacon 20 1.t O 32 34 5 8 6 6 11. Copper 5 6 6 7 2 2 2 2 12. Rubber 1 :3 :3 5 13. Cocoa 14. Lead. IS. Cattle hides 14 17 17 17 16. Aluminum 17. Zinc 3 5 S 7 18. Tin ore 8 ? 7 9 19. Jute - - - - -- - - -- -- -- - -- - - - ..... -- Total 44 48 50 S6 33 32 37 42 68 106 107 117 31 36 37 41 76 76 78 86 1/ A: Annual rate of first six months. B: Annual rate adjusted for seasonal variations and arrivals of bulk purchase'imports. y Philippines., Cuba, Haiti, Dominican Republic. Mexico. Guatemala, Honduras, Salvador, Nicaragua, Cos'ta Rira, Colombia, Panama, Venezuela, Ecuador, Bolovia. :.if Peru, Chile, Brazil, Uruguay, Argentine Republic, Paraguay.  TARI,F, i U.K .. Interna.tional Accounts bl Ma,;ior ArAas! 1949. 19')0 and 19'1.1 (In millions of' pounds sterling) Total Sterling Area Dollar Area ~~51 Estimate~1 - 19'5) "Estimate-s?:.7 1951 Ls t il~atcs'?J 1949 195011 ..L -lL -L .-JL 1949 195011 ~ ..L _0_ -1L 1949 195011 A .JL _0_ _D_ 1. Exports of U.K. merchandise (f.oob.,) 1,784 2 g o48 2,253 2,253 2s366 2,501 926 980 1,078 1.,078 1,1:;2 1,197 166 239 263 263 276 292 20 Adjustment +3'-1- +36 +35 +35 +35 +35 -18 -44 -31 -31 -31 -31 +23 +23 +23 +23 +23 +23 3. lvIerchandise export s adj'.lsted 1,818 2,084 2,288 2,288 2~1}01 2,536 908 936 l,Oh7 1,047 1,.101 1,166 189 262 286 286 299 315 4. U.Ko imports for consumption (e.i.f.) 2,272 2,558 2,897 3,0/-1-2 3,042 3,042 852 989 1,185 1,.255 1,255 1,255 500 442 470 470 470 470 5. Adjustment -307 -258 -282 -300 -300 -300 -100 -79 -89 -97 -97 -97 -60 -38 -49 -14-9 -4,9 -49 6 •. lvierchandise import s adjusted 1.965 2a300 2,615 2.,742 2,742 2,742 752 910 1,096 1;158 1,158 1,158 440 404 421 421 421 421 7. U~K. surplus (+) or deficit (-) on merchandise account -147 -216 -327 -454 -341 -206 +156 +26 -49 -Ill -57 +8 ,....251 -142 -135 -135 -122 -106 8 0 U.K. surplus (+) or deficit (-) on service acc01mt (net) +109 +320 +332 +337 +3 t4-2 +347 +99 +134 +152 +151} +156 +158 -51 +38 +40 +41 +41 +42 9. Current account surplus (+) or deficit (-) -38 +104 +5 -117 +1 +141 +255 +160 +103 +43 +99 +166 -302 -104 -95 -94 -81 -64 11 Annual rate of first six months~ gJ All estimates (At B, C. D) assume price increases for both exports and imnorts; they differ in the fol1o~ring respects, however: A; no volume changes over 1950 (annual rate of the first six months) for imports9 no volume changes over 1950 for exports. E: 5% volume increase over 1950 for imports, no volLlITle change over 1950 for exports3- C: 5'~ volume increase over 1950 for imports, 5% volume increase over 1950 for exportso D; 5% volume increase ov~r 1950 for imPorts, 11% volume increase over 1950 for exports.  TABLE 1 United Kingdom Imports for Commmution of SE'lected Raw l-faterials and Foodstuff!s; 1949, 1910 and 1951 (In millions of pounds sterling) United Kingdom De- TQtal Other sterlin? Area UoS'1) I9Wli' 19501 1950 1 1949 A 13 1951 1949 1949 ....:L .1L 1951 1949 1911 ~2 ....:L .1L 1951 1. \\'001 127 190 190 286 1 1 1 1 120 178 178 268 2. tlheat 122 93 90 90 21 1 10 10 93 7.2. 68 68 8 18 10 10 :3. Cotton 120 97 97 119 7 9 7 9 5 :3 4 42 46 35 42 4. Butter 82 109 109 109 52 76 66 66 5. Tea 66 45 54 54 1 1 2 2 65 lJ4 52 52 6. Sugar 65 64 67 74 20 24 25 27 12 9 9 10 7. Gasoline 50 56 56 58 5 6 6 6 13 4 4 4 8. Tobacco 52 30 52 52 3 2 3 :3 15 10 15 15 2 I/- 2 2 27 8 27 27 9. Petroleum 39 70 70 70 14 27 27 3:3 3 :3 1 1 1 10. Bacon 32 64 48 51 1 1 1 1 6 15 9 10 n. 22 31 31 36 5 5 5 6 7 9 9 10 3 9 9 11 12. 21 37 37 81 18 30 30 67 2 4 4 9 13. Cocoa 20 41 28 37 20 41 28 37 14. Lead 17 15 15 15 13 13 13 13 4 Z 2 2 15. Cattle hides 15 18 18 18 1 1 1 1 .. 16. Aluminum 14 12 15 15 14 12. 15 15 17. Zinc 13 12 12 16 :3 3 3 4 4 ;t, 2 3 3 2 2 2 18. Tin ore 13 12 12 15 .5 .5 .5 6 19. Jute --1Q ---15. -.li _-=-- ~....:::..- --=. 10 .J:5...J:5..~. -=,....::.- -=- _ -=- -=- . . : :. - Total 900 1,011 1,016 1,211 99 151 139 191 323 358 373 471 130 116 107 110 96 86 88 97 ]/ A; Annual rate of first six months. E: Annual rate adjusted for seasonal var1ations and arr1va1 4 of bulk purchase imports.  TAB~ - page 2 Dependencies of Con- American ACCoUnj :tron-Do11ar "!eS;ern Continental E.R.P. tinenta1 E.R.P. Coun- countr:17 s 2 Hemisn.J:1ere .' Countries tries All Other Countries _1950 _ 1950 .!I 19~O It 1q~0 11 .-122Q 1) 1949 ...:L -1L 19151 1949 -..!L .JL 1951 1949 ...:L -1L 19')1 19·'.}Q _'1.- -1L lq,?;~ 1q4C) -..!L 1951 1. Wool 1 3 :3 4 .5 8 8 13 2. Wheat 2 2 2 3. Cotton 17 11 16 20 .) 3 l} .5 46 28 32 39 4. Butter 30 33 43 43 5. Tea 6. SUfar 33 31 33 37 7. Gasoline 2 8 8 8 6 6 6 20 20 20 21 10 12 12 13 8. Tobacco .5 6 5 5 9. Petroleum 1 2 2 2 1 1 1 1 5 8 8 B 1.5 28 28 28 10. Bacon 20 40 32 34 .5 8 t t: 11. Copper .5 6 6 7 2 2 2 2 12. Rubber 1 :3 3 .5 13. Cocoa 14. Lead 15. Cattle hides 14 17 17 17 16. Aluminum 17. Zinc 3 .5 .5 7 18. Tin ore 8 7 7 9 19. Jute - ------ - ---- -- - -- - -- - -- - -- Total 44 48 50 56 33 32 37 42 68 106 107 117 31 36 '37 41 76 76 78 86 11 A: Annual rate of first six months. B: Annual rD.te adjusted for seasonal va.riations and arrivals of bulk purchase' imports. y Philippines, Cuba, Haiti, Dominican Republic, Mexico. Guatemala, Honduras, Salvador, Nicaragua, Costa Ri~a, Colombia, Panama. Venezuela, Ecuador, Bolavia. II Peru, Chile, Brazil. Uruguay, Argentine Republic, Paraguay •.  T.ABLE 2 Basic Data on Price Chani!es Affecting U.K. I9120rts Changes in U.K. prices. as quoted on August 1, Frics inc~ea3es 1950, over the average assurned for 1951 of the first six mQ..nths projections R=e:: mc;; a.: .: :'.: k;.:; s____~_...,......._ (in percent) \lioo1 + 18.8 + 50.0 At the re-opening of Aus- tralian au~tions in the last ",reek of August, price quotations 'IIlere in general 4(Jjb hie;her than in June 1950 a,t the close of 19!.}9-;P senson.. U .E:, \·'h01!?51"1e 'Prices in June lIrere already io% higher than the average of the firs't half of the year~ Therefore, a 50% in--- crease of imuort urices was considered ep~ro~riate for the projection. Wheat + 9.8 No price change has been assu~ed since in the first half of 1950 internati3nal v!heat sales Irlere generally mad.e at the ceiling "price established under the In- ternaticr;.al 'VJheat Agreement and the ceiling price is e~ected to remain un- changed. Cotton + 22.3 + 22.3 Butter + 9.0 No price changes have been assumed since the increase of domestic nrices reflects only changes in subsidY allo CE'.t ions. Under the present five-year contract ",rith Denmark, butter prices can be revised yearly in both directions up to a mayimum of 7~5 rercent. Notwithstanding the strong nressure of Denma,rk as Nell as other eJq)ortlng coun- tries for an up,·!ard adjust- ment, the Ministry of Food did not agree to a 'Price increase for the 1950-51 season.  TAB~ 2 - page 2 Changes in U.K. prices, as quoted on August 1, Price increases 1950, over the average assmned for 1951 of the first six months ~rojections __________________ ~R~e~m_a~r~k_s (in percen.t) Tea Prices declinei during the last months in the vreekly sales held in Colo~bo. HO'tTever t no change of prices has been assmned since priQes paid under jviinistry of ]'006. bulk pur- chases are not eA~ected to decline. Sugar + 1000 A 10% increase of import prices ha.s been 8,ssmned in vie\', of the trenc1, in 1,'.Tor1d prices, although no change occurred in U.K. ':Ihole &8.1e prices because .of subsidy payments and bulk purchase agreements. Gasoline + 24,,7 + 4 .. 0 u.S. prices ht':tve been used as the basis for this pro- jection, ass~~ing that thGr reflect changes in 1,rorld prices. U .. K, domestic prices increased by 24.7% due to the cessation of gasoline r!'"tioning in Hay and the slr.ru.lt~tneous in- cree,se of the gasoline tax., Tobacco Petrolemn Bacon + 6.6 + 6.6 Copper + 16.2 + 16.2 Rubber +117.3 +117.3 Cocoa + 8.6 + 30.0 A 301~ increase of import prices has been assumed for projections on the basis of the unit value increase during Augur,t over the average of the first six ;nonths, as \'r~ll as in view of the tre~n in \ITorld prices. ';Chis rise  TABLE~ - page 3 Changes in U.K. prices, as quoted on August 1, Price increases 1950? over the average assUlnea for 1951 of the first six months pro.jectl.2E-L- (in percent) Cocoa (con tde) of prices is reflected to a minor extent domes" tically because of sub- sidy paymp'lI.ts. Lead + 4.3 + 4.3 Cattle hides :Even though ST-ot ~:Jrices declined. by 8~;, r.o c:1ange i1as been ctssume:l since the nrice de- crease is believe~ to be due to tf.npo:;.'ary local market condition~ Aluminum Zinc Tin ore + 22.1 + 22.1 Jute .5.2 As in the case of cat- tle hides, the spot pr:i.ce decline has been disree;arded~ All other imports + 9.0 The expectation of a 91b price increase for all cOr:1modHies not 1n(l,1-- vidually analyzed is based on the assamption that the prices of not analyzed foodstufis ".rill increase -oy 55;, those of rat'" Jnaterials by 157~' ani those of finished manufactures by l07~ over the prices prevail in.; in the first six months of 1950. In the case of foodstuffs and ra't,! materials, the projected price in- creases roushly corres- pond to the average price increases of the analyzed co~~odities if the extraordinary price increases of rub ,. bel' and "!001 are dis- regarded.  TABU; 3 Ul;:JTE.1}'~Il'JCT'()1'[ IfJiPOR.TS FOR r,ONSUHPTION. 1949. 1950 ANi) 19'11 (In million~ of y,ounds sterline:) First 6 months of 1950 19L~9 (annual rdteL. 19.51 (estimate) Analyzed by Amtlyzed by Analyzed by Tote,l TotaJ. commodity Other Total commodity Other TotR 1 cornmod! ty Other A J.! B 2:..1 United Kingdom dependencies 99 un 280 151 248 399 191 270 461 488 Other stArling area 121 249 572 158 232 590 471 251 ~ 767 Total sterling area 422 430 852 509 480 989 662 523 1,185 1.255 Canada 130 95 225 116 59 175 110 64 174 174 United States 96 126 222 88 120 208 97 131 228 228 American account countries 44 --2. ---2l 48 11 ~ 12 68 68 Total dollar area 270 230 500 252 190 442 263 207 470 470 Non-dollar "lestern Hemisphere 33 92 125 32 144 176 42 157 199 211 Continental E.R.P. countries 68 392 460 106 430 536 117 469 586 621 Dependencies of continental E.R.P. countries 31 ~ ~ 36 ...21 41 ~ 99 105 Total continental E.a.po countries and dependencies 99 448 547 142 483 625 158 527 685 726 All other countries .2.£ 172 21+8 Th 250 86 272 ~ -2.§Q Total 900 1.t.IZZ ~ 1,011 1,547 1,211 11;686 2,897 ),042 - Of which: Foodstuff and tobacco 439 530 969 446 588 1.034 467 617 1,084 1,138 Crude and semi-manufactured materials 461 313 774 565 510 1,075 744 587 1,331 1,398 Finished manufactures 529 529 449 449 482 482 506 ~I Taking account of price changes only. Y Assuming a 5% incr~ase in volume over the average of 1950 (first six months) as ..rel1 as price changes ..  TABLE 4 Exoorts of U.1:. I:lerchanliise! 1949..t....J.9S0 and 1951 (In millions of pounds sterling) 19,21 Estimates T:>ta Total TotaJ,. 1949 195011 A 2 1 "£11 ,..v 4/ --i United Kingdom dependencies 282 359 395 415 439 Other sterling area -~ 621 68:1 J11 758 Total sterling area 926 980 1,078 1,132 1,197 Canada. 80 113 124 134 145 United States 57 84 93 93 93 American account countries Total dollar area. 29 166 42 239 46 263 40 -""- 276 -- 1:)4 2')? ,,- Non-dollar Western Hemisphere lc6 105 116 122 129 Continental E.~P. countries 376 508 559 537 620 Dependencies of continental E.R.P. countries 34 32 ...J2 37 39 , Total continental E.R.P. coun- tries and dependencies 410 540 594 624 659 All other countries 176 184 202 212 224 t:!al 1,784 2.048 .:;;;..L..:._ ¥.!35J, 2a 66 bjOl ]J Ann'~alrctte of first six months .. y Taking account of price cna,nges only. JJ Assuming a 5% increase in volume over the average of 1950 (first six months), as well as price changes. ~ AssR~ing an 11% increase in volume ova' the avera~e of 1950 (first six months), as well as p~ice changes.  r ~ ...: t 'J'AnLF...i U.K. InternationAl Ac('ounts b~ Ma,ior Arl'!as l 1949 1 19')0 Md 19<;1 (In millions of pounds sterling) Total Sterling Area Dollar Area 19:21 Estimated] 12:2) Estim."ltf'SV 1221 ,,~sti!''1t{'sY ~ 195011 ...!-. l -L -.1L 1949 195011 ~ ..1L ..JL .JL 1949 195011 ...l:.- .JL ..JL ..l ,arts of U.K. merchandise ·.0. b,) 1,784 2~O48 2,253 2,253 2$366 2,501 926 980 1,078 1,078 l,l}2 1,197 166 239 263 263 276 2S .justment +3 -1- +36 +35 +:"15 +35 +35 -18 -44 -31 -31 -31 -31 +23 +23 +23 +23 +23 +; ·rchandise exports adj~sted ' 2,084 l,a18 2,288 2,288 2~ltOl 2,536 908 936 1,0 1"'7 1,047 1,101 1,166 189 262 286 286 299 T K. ir;,ports for consumption :.i.f.) 2,272 2,558 2,897 3.01 -1-2 3,042 3.042 852 989 1,185 1,255 1,255 1,255 500 442 470 470 470 4~ just:nent -307 -258 -282 -300 -300 -300 -100 -89 -60 -49 ..l+9 -49 _1 -79 -97 -97 -97 -38 rehandise imnorts adjusted 1,965 2,300 2,615 2 t 742 2,742 2,742 752 910 1,096 1,158 1,158 1,158 440 404 421 421 421 4; - (+) .or deficit (-) K. suru1us merchandise account -147 -216 -327 -454 -341 -206 +156 +26 -49 -111 -57 +a -251 -142 -135 -135 -122 -l( K. surplus (+) or deficit (-) service eCCou.nt (net) +109 +320 +332 +3:37 +31.1-2 +347 +99 +134 +152 +15h +156 +158 -51 +3a +40 +41 +41 +1 rrent account surplus (+) or ficit (-) -38 +104- +.5 -117 +1 +141 +255 +160 +103 +43 +99 +166 -302 -104 -95 -94 -81 _f ~a1 rate of first six monthso 11 estimates (A, B, 0, D) assume 'Price increases for both exports and illltlorts; they differ in the follo\·ring res'f)ects, however: A: no volume changes over 1950 (annual rate of the first six months) for imports, no volume changes over 1950 for exports. I: 5~ volume increase over 1950 for imports, no volume change over 1950 for e:A."J)orts. C: 5,~ volume increase over 1950 for imoorts, 5% volume increase over 1950 for exports. m 5:' volume increase OVf!r 1950 for imPorts, 11% volume increase over 1950 for exports • ....... ,*~«I<,..--. '.,--r- '....41 _,,""".J- __ ...... , .....  TABL::; .5 - page 2 Continental E.• R.P. Countries and Non-Dollar \'Je ster n Hemis12here De12endencies All Other Countries 1221 Estimate~ 1221Estimate~ i251Estimate~7 1949 19501/ ...A.- -1L -L -1L 1949 12tjoll i.. ..1L. ~ J .. .. 1<149 . 0 122 .-11 -A... .JL .-9- .JL 1. Exports of U.K. me,.cha.ndise (f._0. b.) 106 105 116 116 122 129 4·10 540 +34- 594 594 624 6" 176 18,'-1- 202 202 212 224 +22 . +22 2. Adjustment. -2 +3 +8 +21 +21 +21 +2/- +23 +20 +22 +22 3. Merchandise exnorts adjusted 104 108 116 116 122 129 418 574 615 615 645 6811 199 204 224 224 234 246 4.- U.K. imports for consumption (c.i.f.) 125 176 199 211 211 211 547 625 685 726 726 72' 248 326 358 380 380 380 5. Adjustment -20 +16 -2 -3 --3 -3 -89 -85 -87 -93 -93 -9.3 -38 -72 -55 -58 -58 -58 6. Merchandise imports adjusted 105 192 197 208 208 208 458 540 598 633 633 633 210 254 303 322 322 322 7. U.K. surplus (+) or deficit (-) on merchandise account -1 -84 -81 -92 -86 -79 -40 +34 +17 -18 -+12 +47 -11 -50 -79 -98 -88 -76 8. U. K.- surplus (+) or deficit (-) on service account (riet) - 9. Current account su,rp1us (+) or deficit +J+8 +80 +85 +86 +87 +88 +22 +68 +67 +6e +69 +70 - 9 .. ....12 -12 -11 -11 (-) - . +47 -4 +4 -6 +1 +9 -18 +102 +8 I} +50 +81 -1-117 -2(; -SO -91 -110 -99 -87 lJ Annual rate of first six months. . Y All estimates (A, B, C, D) assume price increases for both exports ~nd imports; ~hey differ in the fol1ot-ring resI)f "J;s, however. A: no volume changes over 1950 (annual rate of the 'first six months) for imports. no volume changes over 19~) for exports. B~ 5% volume increase over 1950 for imports, no volume change over 1950 for exports. c: 5i~ volume increase over 1950 for imports$ 5% volume increase over 1950 for exports. D; ,5% volume increase over 1950 for imports, 11% volame increase over 1950 for e)~orts.  , l' .it ~ TABL~ 5 - page 2 Continental E.R.P. Countries and Non-Dollar western HemisEhere Dcllendencies All Other Countries 1221 Est1matesY 1221 Estirnate~ 12:11 :ii]stir.1ate£ 1949 19r:,01/ J:.... .1L .JL .JL 1949 19<;01/ ...lL .JL .JL Ji.: . 1()49 . 12201/ l l .JL :xports of U.K •. me7chandise (f ..0. b.) 106 105 116 116 122 129 410 540 594 594 624 6), 17~ 18!.j. 202 202 212 .djustment -2 +3 +8 +34' +21 ±?1 +21 +2/' +23 +20 .+22 +22 +22 :erchandise exnorts adjusted 104 108 116 116 122 129 418 574 615 615 645 68Q 199 204 224 224 234 '.K. imports for consumption (c.i.f.) 125 1'76 199 211 211 211 547 625 '·685 726 726 724 248 326 358 380 380 .djustment -20 +16 -2 -3 -3 -3 -89 -85 -87 -93 -93 -93 -38 -72 -55 -58 -58 !erchandise imoorts adjusted 105 192 197 208 208 203 458 ,5LfO 598 633 633 633 210 254 303 322 322 T.K. surplus (+) or deficit (-) on erchandise account -1 -84- -81 -92 -86 -79 -40 +34 +17 -18 +12 +1+7 -11 -50 -79 -98 -88 .K. surplus (+) or deficit (-) on ervice account (net) - +48 +80 +85 +86 +87 +88 +22 +68 +67 +6c1 +69 +70 - 9 -1? -12 -11 rrent a.ccount·surplus (+) or deficit • -) .. +47 -4 +4 -6 +1 -18 +102 +9 +81~ +50 +81 ·\.117 -2(; -SO -91 -110 -99 Annual rate of first six months. All estimates (A. B. C,D) assume price increases for both exports ~nd imports; they differ in the follo\'ring resp! "ts, however: A: no volume changes over 1950 (annual rate of the first six months) for i~o~ts. no volume changes over 19:J for exports. E~ 5p volume iucrease over 1950 for imports, no volume change over 1950 for exports. C: 5;~ volume increase over 1950 for imports, 5% volume increase over 1950 for exports. D' .5% volume increase over 1950 for imports, 11% volume increase over 1950 for exports • .,....'<.........-,  TAJ~L};; 6 U.K. J3abuce of ~rrcde. 1949, 1950 a:nd 1951 (In millions of pounds sterlins) Trade bal<),l1ce ChDn!'':es in trade bn12,nce U.K. export sur-plus (+) or deficit (-) betu;8n 1950 (6 months) ~ " 1/ A 19)cl '" t" ':B..':';8 ~7 ~~f',tesG and 1951 estimates 1949 19 ~ ..JL. A :s -L. 2 Sterling area +156 + 26 - 49 -Ill - 57 + 8 - 75 -137 - 83 -18 Dollar area -251 -142 -135 -135 -122 -106 + 7 + 7 + 20 +36 Non-dollar Western Hemisphere - 1 - 84 - 81 - 92 - 86 - 79 + 3 - 8 - 2 +10 Continental E.R.P. countries and deuendencies - 40 + 34 + 17 - 18 + 12 + 47 - 17 - 52 - 22 +13 All other countries - 11 =-2Q =--2:i - 98 - 88 -=---12. - 29 - 48 - 11 -26 . Total -147 -216 -327 -454 -341 -206 -Ill -228 -115 +10 ~I For footnotes, refer table 5.  Table 7 U.K. Balance on Current Account. 1949, .1950 an<1._1951 (In millions of pounds sterling) Current account balFnce Changes in current accotmt U.. Kt surolus (+} or deficit {-l balance bet '''een 1950 and _. __-12..51 J:istimates1!_ 1951 estimates ___ 1949 195011 A B -iL -.SL L Sterling' area +255 +160 +10, + 43 + 99 +166 -.57 -117 - 61 + 6 Dollar area -)02 -104 - 95 - 94 - 81 - 64 + 9 + 10 + 23 +40 Non-dollar '.;estern Hemisphere + 47 - 4 + 4 - 6 + 1 + 9 + 8 - 2 + 5 +13 Continental E.R~P. countries and dependencies - 18 +102 + 84 + 50 + 81 +117 -'-18 - 52 - 21 +15 All other COUIitries - 20 - 50 - 91 -110 - 99 -41 - 60 - 49 Total - 38 +104 + 5 -117 + 1 +141 -99 -221 -103 +37 JJ For footnotes, refer ta,ble 5.  Table 8 Service Accounts of the U.K. Brl,lrtTICB of Payments! 19["2-1951 (In millions of POllilds sterling) 1950 (Aa;.r~al rete based. on 1242 12'-1-8 1249 .___.:~::i.!. .:.:::~:::l}~_ d.a ta ) 19,21 iestimate2 payments Receipts balance Payments Heceiuts Balance EaYllle Ilt s Recetpt$ palanee Payments HeceiT)ts Balance payments Receiuts Balance ~ Government transac- tions (net) JJ 230 -230 87 - 87 140 --140 126 -126 175 -175 Shipping y 165 198 + 33 174 250 + 76 192 280 + 88 192 306 +114 210 Y 327 Y +1172J Interest, profits and dividends JJ 94 171 + 77 102 174 + 72 105 167 + 62 110 196 + 86 135 215 +80 Travel !±I 76 21 - 55 66 33 - 33 73 44 - 29 64 52 -- 12 85 75 - 10 Migrants ft.."!ldg~ legacies, private gifts (net) 21 46 .... 46 44 -44 31 - 31 16 - 16 10 - 10 Other (net) §j 88 + 88 143 +143 159 +159 274 +274 330 +330 Total (excluding gov- ernment) 381 478 + 97 386 600 +214 401 650 +249 382 828 +446 440 947 +507 Total (including gov- ernment) 611 478 -133 473 600 +127 5hl 650 +109 508 828 +320 615 947 ....332  Table 8 .... page 2 11 Includes overseas expenditures for military, relief and rehabilitation, and administrative and diplomatic transactions, as ~fTell as colonial grants.~ jJ Dry cargo shipping only, covering chartering, frei{,:ht, passenger fares a.nd port expenditures but excluding oil tanker charges. ,Estilnates of shipping earnings in this table apply to the assumption that no ch~nge ~,'Til.l occur in the volume of imports and exuorts over the first six months of 1950, i.e .. to Estimate A in tables 5, 6 and 7. The projections for shipning nayments and receipts according to the other assum-otions a.re as follov!S: Payments Receints Balance Estimate B 212 334 +122 Estimate 0 214 341 +127 Estimate D 214 350 +132 11 Excludes payments through London agents for overseas investments o1tmed by non-residents. Also excllldes o'V'erseas earnings of U.K. insurance, shipping and oil companies. }!/ Includes business travel. Includes estimates of gift parcels but not mj,grants personal bel()ngings. M This miscellaneous heading covers all other service transactions, eego overseas transactions of British oil companies (other than capital expenditures), insurance, cOmDlissions p royalties and other remittances for services rendered~ Also included are dOlnestic sales of non-moneta~J gold; disbursements of international organizations; film remi ttaaces; and an allo'l:.1ance for "errors and omissions u on current account.  Table 8 Service Accounts of the U.K. ll:'tlnncll of PA.?ments l 1942-1921 (In millions of po~~ds sterling) 1920 (A:XI..lal rete based on 124Z 19'+8 1242 __ ---'~tl1..!:::~tme d,ata) 1251 ~estimate} payments Re<-eipts llalance pa.l[ments Rec:eiuts Balance PUI!!l<,mts Receipts Balp.Dce mn:ents RE:ceints Bllhmce payments Receipts Ba1fll1ce ,Government transac- tions (net) JJ 230 -230 87 - 87 140 -140 126 -126 175 -175 Shipping Y 165 198 + JJ 1'74- 250 + 76 192 280 + 88 192 J06 +114 210 Y 327 Y +117 Y Interest, profit's and dividends J! 94 171 + 77 102 174 + 72 105 167 + 62 110 196 + 86 135 215 +80 Travel !:!I 76 21 - 55 66 33 - 33 73 44 - 29 64 52 - 12 85 75 - 10 Migrants ft.wp legacies, private gifts (net) 5/ 46 -46 44 -44 J1 - '31 16 - 16 10 - 10 Other (net) Y 88 + 88 143 +143 159 +159 274 +274 J30 +330 Total (excluding gov- ernment) J81 478 + 97 386 600 +214 401 650 +249 382 828 +446 440 947 +507 Total (including gov- ernment) 611 478 -133 473 600 +127 541 650 +109 508 828 +:320 615 947 -332 .. ... ,.- ----./_-~'" '-~'-  .--'*""--~ .... ,.,-~ ............... _-" .'-...-...-"., Table 8 - page 2 JJ Includes overseas expenditures for military. reUef and rehabilitation, and a.dministrative an,! diplomatic transnctions. as Hell as colonial erants. iJ Dry cargo shipping only, covering chn.rtering, freil"ht, 'Passenger fares !lnd port eX1)enditures but excluding oil tanker charges. Estimates of shipping earnings in this table apply to the assumption that no ch~nge ~'ill oCCllr in the volume of imports and exports over the first six months of 1950, i.e .. to Estimate A in tables 5. 6 and 7. The 'ProJections for shipninr, payments and receipts according to the other assumptions are as follows: payments Receints Balance Estimate B 212 334 +122 Estimate 0 214 341 +127 Estimate D 214 350 +132 :JJ Excludes payments through London agents for overseas investments o~med by non-residents. Also excll1des overseas earnings of U.K. insurance. shipning and oil companies. !Y Includes business travel. ~ Includes estimates of gift parcels but not migrants personal belongings. . This miscellaneous heading covers all other service transactions. e.g. overseas transactions of British uil cOlllPa.nies (other than caTJital expenditures). insurance. commissions, royalties and other remittances for services rendered. Also included are domestic sales of non-monetary gold; disbursements of international organizations; film remittances. and an allo~,ance for "errors and omi!l5ions" on current account.  U. K. Servic~ Account s! by ilIa,jor Areas (In millions of pounds sterling) lCQQ. (Annual Rate, based 1951.11 1947 1948 .1949 on Jan.-June dat~ (e st imB.te) Sterling area +47 +115 + 99 +134 +152 Dollar area -136 - 62 - 51 + 38 + 40 Non-dollar "'estc~·'n H"3misphere + 29 + 40 + 48 + 80 + 85 Continental E.R.P. countries and dependencies - 31 + 33 + 22 + 68 + 67 All other countries, ~md un- allocated - 42 ±-.l =---2. - - ::..Jg Total -lJ1 +127 +109 +,20 +",2 11 This es~imate pertains to the assumption that no change 'tlill occur in the volume of imports and exports over the first six months Of 1950 (Estiillate A in tables 5, 6 and 7)G According to the other assumptions, shipping earnings are expected to increase (see note 2 to table 8); the service account projec- tion is thereby changed as follows: 1951 estirr:ates B -2...- .JL Sterling area +15 4 +156 +158 Dollar area + 41 + 41 + 42 Non-dollar 'VJestern Hemisphere + 86 + 87 + 88 Continental E.R.P. countries and depenriencies + 68 + 69 + 70 All other countries Total - 12 +337 =-ll +342 -- - 11 +347