HC Deb 12 April 1973 vol 854 cc321-2W
Mr. Deakins

asked the Chancellor of the Exchequer what is the correlation between private investment in United

INTEREST RATES ON CAPITAL FOR PRIVATE INVESTMENT
Average rates in December 1972: per cent per annum
Bank borrowing
Commercial Bond Yield Ordinary Share Yield Overdraft and Short Term Longer Term
France … 8.19 4.55 8.80–13.60 7.65–11.15
Germany … 8.70 3.08 8.75–9.25 n.a.
Italy … 8.08 2.93 7.74* 4.49*
Japan … 6.98 l.85† 4.50 7.70
Netherlands … 8.11 5.00‡ 5.75–8.00 7.93
Sweden … 7.25 3.29 6.75–7.50 7.50
United Kingdom … 10.40 3.33 8.5§ n.a.
United States of America … 5.11† 2.73† 5.84¶ 6.31¶
n.a. = Not available.
* As at September 1972.
† As at November 1972.
‡ International companies based in Netherlands.
§ Minimum rate.
¶ As at August 1972

Kingdom manufacturing industry and economic growth.

Mr. Nott

The relationship between investment and growth cannot be estimated precisely.

Mr. Deakins

asked the Chancellor of the Exchequer how current average United Kingdom interest rates on capital for private investment in manufacturing industry compare with those in Sweden, West Germany, France, Italy, Holland, Japan and the United States of America.

Mr. Nott

It is not possible to make precise comparisons of interest rates charged on capital for industrial and commercial investment in different countries because of institutional differences and because the data available in international publications relate to varying periods of loan and reflect the different pattern of financing as between one country and another. Differing tax regulations and the existence of additional charges may mean that interest rates do not reflect the true rate of borrowing.

An important development in recent years has been the growth of an international market in short- and medium-term finance which has reduced the dependence of large commercial organisations on domestic interest rates. In the table below, representative interest rates or yields on bonds and debentures, on shares and on short- and longer-term bank lending, are shown for December 1972. Separate statistics are not available in respect of borrowing by manufacturing industry. Detailed notes on the rates in each country are available in the OECD Financial Statistics, from which the figures have been drawn.