It should be recalled, however, that currently there is a very large gap between the potential of our economy, or aggregate supply, and aggregate demand for our output. The evidence for this is widespread.
Manufacturing capacity utilization rates are at their lowest level in at least a quarter century, the unemployment rate has increased by 2.9 percentage points to its highest level in 11 and a half years, and, according to our July Business Outlook Survey, only 28 per cent of firms would have difficulty meeting an unexpected increase in demand, which is the lowest level since the aftermath of 11 September 2001.