§ In the monetary field, the policy I have pursued has been to allow an increase in money and credit sufficient to support a rise in the level of economic activity but not so large as to compound the pressures of cost inflation. No estimates 1363 are yet available for the full financial year of domestic credit expansion or money supply; but figures for the first three quarters, which have already been published, show that the money supply increased at an average rate of about 3 per cent. a quarter. As the House will know, there have been massive sales of gilt-edged stock by the authorities during the last quarter. Despite this, the final figures will undoubtedly show that the pace of monetary expansion over the year as a whole was substantially faster than was foreseen last April.
§ So far as bank advances and the gilt-edged market are concerned, our operations have been notably successful. The restricted lending of the banks has been held within the limits set in the last Budget. It will be recalled that the clearing banks had almost reached their limit shortly after the Government took office. Despite this, their restricted lending at mid-March was about 1 per cent. below the limits set a year ago, though the shortfall reflects some delays in tax payments as a result of the postal strike.
§ In the gilt-edged market there has been a remarkable turn-round in recent months, and this has enabled us to sell an unprecedentedly large amount of stock. The result is that we have more than reversed the substantial official purchases of stock after last April's Budget and the exceptional redemption of Savings Bonds last September. It is clear that we shall end the year as substantial net sellers of stock. This is a considerable achievement in a year which included the stock redemption which I have mentioned.