Success at Last, 1969

1969 was the second of the ‘two years of hard slog ’ that Roy Jenkins had warned in his 1968 Budget would be needed to get the country back into balance. But if the slog continued would the promised surplus appear? There was every likelihood of a substantial improvement in the current balance of payments in 1969, but the promised surplus of £500 million at the end of the year was beginning to look to commentators like ‘pie in the sky ’.1 The pound was expected to remain weak and undergo the same kind of speculative batterings that had raged in 1968. So long as the mark and the franc exchange rates remained misaligned, currency uncertainties would issue in periodic crises like that of November 1968 and would envelop sterling even if they did not originate in sterling ’s difficulties. If the current account improved steadily, a flight from the pound into deutschmarks could still scupper all chances of holding to the parity when the exchange reserves had fallen so far and further borrowing was increasingly difficult.