§ 15. Mr. Hirstasked the Chancellor of the Exchequer if he will make a statement about the current level of interest rates.
§ Mr. Ian StewartInterest rates remain on a downward trend.
§ Mr. HirstI thank my hon. Friend for his reply. While welcoming the recent fall in interest rates, may I ask him whether he agrees that interest rates in Britain and elsewhere in the world would be lower were it not for the colossal budget deficit in the United States? Does my hon. Friend further agree that the rapid reversal of interest rates since July's increase confirms that the Government were right to stick to their strategy?
§ Mr. StewartI agree with my hon. Friend that a reduction in the budget deficit in the United States would be welcome, particularly because it would help to ease the burden on interest rates around the world, especially in Third world countries. A 1 per cent. cut in interest rates would lead to a reduction of nearly $2 billion in interest payments for non-oil developing countries. I welcome the reduction since July, which my right hon. Friend the Chancellor predicted, contrary to the Leader of the Opposition's views at the time, which were that the rate rise was a disaster of immense proportions. If that three-month move in interest rates was a disaster of immense proportions, the right hon. Gentleman cannot have very much to complain about.