Utility clothes were certainly cheap: prices were fixed, tax-free and subsidised; manufacturers enjoyed economies of scale through limiting designs and long runs. But "of cheapest cut" suggests shoddiness - exactly the opposite of Utility. Utility cloth, clothing, furniture and other products met tightly drawn standards.
Researching a book about Utility clothes I was amazed how many examples of Utility are still around, more than 40 years after the Utility scheme ended.
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