David Horowitz, Governor of the Bank of Israel, called today for rigid price and wage restraints to put a brake on inflation. Horowitz released a report showing that during the six month period that ended on June 30, currency in circulation rose by more than 15 percent, a usual sign that inflationary pressures are at work. Horowitz noted that the period covered by the report was prior to last month’s devaluation of the Israel pound. But he said the inflationary trend continued up to Sept. 1 and the Bank was keeping a watchful eye on the money market. He attributed inflation to heavy spending in the public sector, mainly for defense, schools, roads and hospitals. He observed, however, that the living standards of Israelis have risen by an average of 25 percent in the four years since the Six-Day War, indicating a high rate of personal spending.
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