Inflation (Hansard, 8 June 1989)

§ 10. Mr. Duffy
To ask the Chancellor of the Exchequer what is his estimate of the underlying rate of inflation for the British economy; and whether he will make a statement.

§ Mr. Brooke
The best guide to the underlying rate of inflation is provided by the RPI excluding mortgage interest payments—[Interruption.]—

§ Mr. Speaker
Order.

§ Mr. Brooke
—which currently stands at 5.9 per cent.

§ Mr. Duffy
Why did not the right hon. Gentleman's right hon. Friend receive a more encouraging response today from sterling and the market in view of his very sturdy reaffirmation in last night's debate of his well-known and well-tried counter-inflationary policy?

§ Mr. Brooke
That, if I may say so, seems to be a question more for the markets than for me. The markets have, in fact, been thoroughly calm.

§ Mr. Gow
Will my right hon. Friend reaffirm his commitment to maintaining high interest rates until we abate the rate of monetary growth? Will he reaffirm the commitment of the Government to move towards stable prices at the earliest possible moment?

§ Mr. Brooke
My right hon. Friend the Chancellor of the Exchequer made that wholly clear yesterday. I am delighted to echo him today.

§ Mr. Nicholas Brown
Is it the Government's view that shadowing the deutschmark has helped to cause inflation in the past?

§ Mr. Brooke
That question, again, goes somewhat wide of the original question that I was asked. As the hon. Gentleman has risen from the Opposition Front Bench, let me say that one of his Front Bench colleagues earlier this week said on television that inflation was higher now than when the Labour party went out of office. As the RPI was then 25 per cent. higher, and the RPI without mortgage interest payments was 50 per cent. higher, it seems to me that the Opposition Front Bench is seeking to rewrite history.