Inflation (Hansard, 16 May 1991)

§ 13. Mr. Burns
To ask the Chancellor of the Exchequer what is the latest year-on-year rate of inflation; and if he will make a statement.

§ Mr. Mellor
All-items RPI inflation was 8.2 per cent. in March. It is expected to fall sharply over the coming months to 4 per cent. in the fourth quarter of 1991.

§ Mr. Burns
In welcoming the improving inflation figures, may I ask my right hon. and learned Friend to confirm that inflation is on target to reach 4 per cent. in the fourth quarter of this year? Does he agree that it ill behoves certain individuals constantly to talk down the improving inflation figures, given that between 1974 and 1979 inflation increased by more than 100 per cent. and that the best year-on-year rate of inflation in that period was only 7.4 per cent.?

§ Mr. Mellor
It is certainly true that during those years average inflation was 15½per cent. Indeed, the lowest point that inflation reached in those years is equivalent to the average that it has been during 12 years under us. I confirm, as I did in my original answer, that we are on course for a 4 per cent. level at the end of the year.

§ Mr. Douglas
How does the Minister explain, apart from the statistical measures of inflation, the traditional view that inflation is a measure whereby the claims on resources in terms of money exceed those resources in real 422 terms? Therefore, how does he explain that the resources that we have available to call into use, in terms of labour and capital, are under-utilised? How does he propose to alter that situation?

§ Mr. Mellor
I find that an utterly inexplicable question. I shall read the record and write to the hon. Gentleman.