HC Deb 30 March 1971 vol 814 cc1338-40
14. Mr. Bruce-Gardyne

asked the Chancellor of the Exchequer what was the increase in the money supply in the first three quarters of the current financial year.

Mr. Maurice Macmillan

In the first three quarters of the current financial year, the money supply, seasonally adjusted, increased by £646 million, £252 million, and £516 million respectively. These figures were published in the March issue of the Bank of England Quarterly Bulletin.

Mr. Bruce-Gardyne

Can my hon. Friend confirm reports that the total increase for the entire financial year is likely to have run out at about 12 per cent., which would make it the second largest increase in the money supply in recent years? If this is the case, does that correspond to my right hon. Friend's definition of a money supply policy which should be less than positive?

Mr. Macmillan

Broadly speaking, the money supply has been contained on the lines of my right hon. Friend's policies. But it would be best if my hon. Friend waited a little while, when he will doubtless hear other details of this, amongst other things.

Mr. Cant

Would the hon. Gentleman confirm the figure given by his hon. Friend? In view of the difference between D.C.E. and money stock, is it not obvious that a great deal of this extra money is as a consequence of the inflow of hot money from abroad, and would he advise the Chancellor to reduce Bank Rate today, rather than next Thursday morning?

Mr. Macmillan

We are watching very carefully the flow of funds from abroad, which, as the hon. Gentleman suggests, can present a problem. But I cannot give any details such as those which he asked for.

31. Mr. Emery

asked the Chancellor of the Exchequer what was the percentage increase in the money supply between 31st March, 1970, and 18th June, 1970, and the latest available date, respectively, expressed at an annual rate; and what is the comparable figure for the period between 18th June, 1970, and the latest available date.

Mr. Maurice Macmillan

Reliable figures are not available for all the periods asked for by my hon. Friend. Figures for the money supply (M3) in the first three quarters of the present financial year were published in the March issue of the Bank of England Quarterly Bulletin. The seasonally adjusted percentage increases in these quarters were 4 per cent., 1½ per cent. and 3 per cent. respectively.

Mr. Emery

Do not those figures show that the Government have been pursuing an active policy to control the money supply, and that the situation is very much better than the comparable figures showed in the last year of the Labour Government?

Mr. Macmillan

Yes, Sir; the most recent estimates indicate that the situation is coming under control, and it looks as though we shall be very close to the target by the end of the year.