§ 27. Mr. Croninasked the Chancellor of the Exchequer what would be the approximate saving to the United Kingdom balance of payments on current account on the assumption that the sterling balances remained at their present level, if the Bank Rate were reduced by 1 per cent.
§ Mr. PowellOn the further assumption that other short-term interest rates also fell by 1 per cent., the saving would probably be about £15 million a year.
§ Mr. CroninWould the hon. Gentleman not agree that that is a very high price to pay for a monetary policy which, as my right hon. Friend the Member for Huyton (Mr. H. Wilson) said, has materially broken down? Would he reassure the House that the Treasury is not 560 completely hypnotised by a 5 per cent. Bank Rate?
§ Mr. PowellCertainly it is not. I would say that the Bank Rate and other monetary measures have been an important factor in bringing about the favourable balance in the last twelve months.
§ Mr. LiptonAnd bringing more inflation.