§ I turn now to funding, a subject of peculiar fascination for many City commentators and of particular interest to a number of my right hon. and hon. Friends. The Government's full fund policy ensures that their borrowing does not add to inflationary pressures. I am clear that this policy remains appropriate, but, from time to time, it has been right to reconsider its detailed application.
§ I have therefore decided that transactions by banks and building societies in gilts will, from now on, be included in 174 the funding definition. In periods when banks and building societies reduce their holdings of gilts, extra sales to other sectors will be needed, but in current conditions the change I am making will help to ease the pressures on liquidity and avoid complicating money market management. If it also leads to some strengthening in the growth of M4, that would be no bad thing.
§ In the year ahead, sales of gilts will, as usual, form the bedrock of the funding programme, but national savings will again make an important contribution.