HC Deb 06 March 1958 vol 583 cc1315-6
10. Mr. Osborne

asked the Chancellor of the Exchequer what is the estimated amount of hot foreign money in the recent increase in our dollar and gold reserves which is likely to be repatriated when the Bank Rate is reduced.

Mr. Maudling

It is impossible to produce estimates on such a basis.

Mr. Osborne

Does my right hon. Friend fear that a substantial reduction in the Bank Rate will cause a substantial outflow of this hot money?

Mr. Maudling

I do not think I should speculate about future movements in the Bank Rate, but, as I said the other day in reply to the hon. Member for Uxbridge (Mr. Beswick), I see no reason to think that there is any strong movement of short-term funds into this country solely to take advantage of the interest rate differentials. The best expert advice I can obtain is that the movement of money represents the flow-back into London of normal commercial deposits.

Mr. Beswick

How can the Paymaster-General reconcile the reply he gave to me, namely, that he sees no reason to believe that there is any build-up for this money, with the reply he has given to his hon. Friend, in which he says that it is impossible to estimate how much of this money is short-term speculation?

Mr. Maudling

It is quite simple. The hon. Gentleman was asking what had happened and my hon. Friend is asking what might happen.