§ This low level of activity in the economy, combined with the fact that wage inflation has been causing employers to lay off labour in order to cut costs, has resulted in a level of unemployment which everyone agrees is too high. Even with a rate of growth of rather more than 3 per cent., the additional margin of 1036 slack which, as I have said, developed in the first half of this year would not be appreciably diminished by the first half of next year. The level of unemployment in the first half of next year would, therefore, in the absence of any policy changes, be higher than was expected at the time of the Budget.