§ 27. Mr. Lawson
asked the Chancellor of the Exchequer what is the effect on the rate of domestic inflation of a rise or fall of 1 per cent. in the £ sterling exchange rate.
§ Mr. Joel Barnett
As a rough rule of thumb, a 1 per cent. rise or fall in the 565W exchange rate can be expected to reduce or increase retail prices by between ¼ and ⅓ per cent. Most of this effect is through within nine months.