HM Treasury News Release

136/98                                       12 August 1998
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            ON COURSE TO ACHIEVE ECONOMIC STABILITY


Commenting on today's Inflation Report from the Bank of England
and today's Labour Market Statistics, Stephen Byers, Chief
Secretary to the Treasury, said:

"I welcome today's good news on the economy showing more jobs,
falling unemployment and a welcome reduction in earnings growth.

"At a time of instability in the international economy,
especially in the Far East, it is vital that we build a stable
economy capable of sustained and steady growth, in contrast to
the cycle of boom-bust that has plagued our economy in the past. 

"Today's Inflation Report from the Bank of England shows that
following the Government's tough action to get the economy back
on-track, growth is set to strengthen through next year with
inflation falling to its 2 1/2% target.

"The projections take full account of the Government's prudent
spending plans which lock in the fiscal tightening already
achieved. The Bank confirm that borrowing is set to fall by 3 1/2%
of national income, exactly as set out in the March Budget.

"Today's news shows that we are on course to achieve economic
stability."




# = pounds sterling