Public Sector Borrowing Requirement

HC Deb 13 May 1985 vol 79 c1150

19. Dr. Mawhinney

asked the Chancellor of the Exchequer what factors he takes into account in determining the level of the public sector borrowing requirement.

Mr. Peter Rees

The principal factor is the need to ensure that the public sector borrowing requirement can be financed in a non-inflationary way without crowding out private sector borrowing.

Dr. Mawhinney

Does my right hon. and learned Friend agree that the safe reduction of interest rates is now of maximum importance? If so, does he believe that such a reduction is dependent on having a lower public sector borrowing requirement?

Mr. Rees

Certainly we would welcome a decline in interest rates, and my hon. Friend will know that they are an indispensable adjunct in controlling inflation. I recognise the connection that he draws between interest rates and the PSBR.