The Moons get a scare when Stanley is rushed to hospital with suspected polio,though it proves to be a false alarm.
Stolen ration books are planted in Harvey's surgery and the police call after Tory councillor Baldock accuses Harvey of theft.
1948 starts badly for Harvey when the local Labour Party, unsympathetic to his recent troubles, accuse him of bringing them bad publicity.
Already unhappy that her false admission in court might lose her custody of Stanley Rita gets more depressed as she loses handsome divorced Howard to Leo and has to accommodate Veronica, after she announces that she is pregnant and her father has thrown her out. To ease congestion Rita lets Stanley go to live with his father but finds Veronica a trying lodger.
As news spreads of Harvey's night with Rita, Nan is disapproving, Frieda feels betrayed and Harvey himself feels used since it nullifies all charges of adultery against his wife.
Erich dies suddenly and Frieda is amazed to get a visit from Joan Gottlieb, a Gentile who married Erich in Manchester before Frieda came to England, and has evidence that she lent him the money for his first bakery. As she is still his legal wife she is claiming her rights, including the house, but Harvey, using his professional contacts, learns from a Manchester lawyer that Erich separated from her and so she is entitled to nothing.
Having inherited Erich's house and money Frieda is now a wealthy woman and Harvey feels financially inferior, considering taking on the bakery but Frieda decides to sell it.
As Maggie proudly shows off the engagement ring Alfie bought her, Harvey travels to Margate with a professional co-respondent to facilitate his divorce. Nan, on the other hand, wonders if she has made a mistake in marrying Geoff and returns to Harvey's though, after a chat with Frieda, she and Geoff are reconciled.