§ Mr. Arthur Lewis
asked the Chancellor of the Exchequer, in view of the growth in money supply, what action he proposes to take; whether this will include cuts in public expenditure and a tightening of credit restrictions; and whether he will make a statement.
§ Mr. Denzil Davies
The latest money supply figures were published this afternoon. Sterling M3, the broadly defined money supply, grew by 2¼ per cent.—seasonally adjusted—in the five weeks to 18th January. A relatively high figure for money supply growth in this period was expected, as a result of the once-and-for-all refunds resulting from the tax changes which my right hon. Friend announced on 26th October. As my right hon. Friend has indicated to the House, it is the trend of the growth in the money supply that matters, and there will inevitably be fluctuations. The task of the authorities is to ensure that after such fluctuations growth comes back into line with the desired trend, and my right hon. Friend is determined that this shall be achieved. He expects to announce the stance of monetary policy for the coming year in his Budget Statement, but monetary developments are kept under continuous review.