§ Mr. Woofasked the Secretary of State for Prices and Consumer Protection if he will estimate the increased costs of imported foodstuffs over the next 12 months, caused through he decline in the external value of the £ sterling.
§ Mr. MaclennanThe recent fall in the value of the £ sterling will affect the price of some imported foodstuffs though its full effect will take time to work through to retail prices. A fall in the value of sterling of 10 per cent. is estimated to cause an increase in the RPI of very roughly 2½ per cent. in the following year. The effect on food prices alone is influenced by the EEC "green currency" arrangements, which reduce the effect of a fall in the value of the £ on foodstuffs comprising about two-thirds of our food imports. Thus, while the value of the "green £" remains unchanged the effect on food prices of the decline in the market exchange rate for the £ is somewhat less than its effect on retail prices generally.
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