§ 40. Mr. Croninasked the Chancellor of the Exchequer what proportion of the increase in the gold and dollar reserves since he raised the Bank Rate to 7 per cent. in September has been brought about by the influx into the United Kingdom of short-term capital funds from abroad.
§ Mr. PowellOn the best judgment that can be made, and apart from the drawing on the Export Import Bank, the increase has arisen mainly from commercial requirements for sterling.
§ Mr. CroninDoes not the hon. Member appreciate that, now that speculation against sterling has largely ceased, any further improvement in the gold reserves 600 brought about by the 7 per cent. Bank Rate will be by the inflow by short-term funds—that is, hot money—which will flow out as soon as the Bank Rate is lowered? Is a 7 per cent. Bank Rate therefore worth it?
§ Mr. PowellI told the hon. Member that the best evidence that I have is that this increase has been due to commercial requirements.
§ Mr. CroninDoes not the hon. Member mean by "commercial requirements" short-term funds flowing into the country?