§ 35. Mr. Cronin
asked the Chancellor of the Exchequer if he will take steps to reduce long-term interest rates, having regard to the circumstance that they have not fallen to an extent consistent with the decrease in Bank Rate.
There is no direct link between movements in Bank Rate and long-term interest rates. As I explained to the hon. Member on 2nd December last, the level and movements of longterm rates of interest, reflect fundamental conditions in the capital market.
§ Mr. Cronin
Would the right hon. Gentleman at least avoid this year such heavy sales of Government securities by the Government as were such a feature last year and which caused long-term interest rates to be inordinately high?
I would remind the hon. Gentleman that I said in my Budget statement that the Government's financial policy during the forthcoming year would continue to be adjusted to the needs of the situation as it develops.
Again, I think my reply would be that our policy on interest rates in general must be related to the general position of the economy.
§ Mr. Osborne
Is my right hon. Friend empowered to give a gentle hint to the building societies that they might consider a reduction in their rates in the near future?
I must look into the question of the general powers I have to give delicate hints in the way my hon. Friend suggests.