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British upturn loses some steam

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As cheerful but beleaguered John Allan can tell you, running a small hardware business in Britain isn't easy these days, even in the relatively prosperous southeast.

What he has to say, between customers in his small and crowded Surrey shop, illustrates some of the reasons that Britain's economic climb out of recession, like America's, has begun to slow down.

The Thatcher government still pins its hopes on reduced public spending, more exports (currently helped by a weak pound, which makes British goods cheaper abroad), and more growth in the United States, whose economy British officials see as the engine that can - federal deficits and interest rates permitting - pull Europe up with it.

In Washington, officials like Commerce Secretary Malcolm Baldrige claim the US slowdown is welcome, to avoid pushing interest rates still higher.

In Britain, however, speedier growth is urgently needed to lower unemployment , which has been running at record levels.

Many British, even those with good jobs and income, are still careful about spending. They comb discount and chain stores rather than conventional small shops with high overheads.

''My paint trade has gone,'' says Mr. Allan as he sells a hammer. ''People can now buy cheaper at a discount store than I can buy wholesale. Wholesalers say they can't cut profit margins any more. . . . My lawn mower trade has gone for the same reasons. . . . People walk in and out of the shop all day, but many of them only want a washer or something small. . . .

''Frankly, I might have had to close up altogether if it wasn't for the toys.''

Shelves and counters of brightly colored toys now vie for space with hammers, nails, and ladders. Despite shoplifting (25 children caught in six months, and two adults nabbed while switching price tickets), the toys have helped.

But John Allan, like the British economy, has a long way to go.

British shoppers in general are beginning to spend less, according to Colin Paterson, chairman of the Retail Consortium, which represents most British retailers. Nationwide, retail spending fell 0.5 percent in July.

On a wider front, the voice of United Kingdom industry, the Confederation of British Industries (CBI), has scaled back its estimate of how fast the U.K. economy will grow this year. The CBI also sees growth tailing off early in 1984.

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