§ Mr. Lawsonasked the Chancellor of the Exchequer if he will publish a table showing domestic credit expansion as a percentage of (a) sterling M3 and (b) gross domestic product, for 1977–78 and each of the seven preceding financial years, together with his best estimate for 1978–79.
§ Mr. Denzil DaviesThe information requested for 1977–78 and preceding years is as follows:
DCE as a percentage of£M3 stock at start of period DCE as a percentage of GDP at current market prices 1970–71 8.7 2.7 1971–72 13.1 4.0 1972–73 33.0 10.5 1973–74 29.8 10.7 1974–75 19.7 7.3 1975–76 14.4 4.7 1976–77 13.1 3.9 1977–78 9.3 2.6 Note: These figures relate to financial years ending on 31st March. The Government's monetary targets relate to 12 month periods ending with the mid-April make-up day for the banking system.
In the table above, domestic credit expansion has been compared, in the case of sterling M3, with the stock outstanding at the start of the period concerned and, in the case of GDP, with the flow over the period. Figures for GDP at current market prices have been chosen as the basis of comparison with DCE which is also estimated at current prices. It is not the practice to publish forecasts of DCE or of GDP in current prices, so no equivalent ratios for 1978–79 can be given. For the purposes of illustration, the expansion of domestic credit of £1,943 million over the five months to mid-September 1978 was equivalent to 4.2 883W per cent.—10.4 per cent. at an annual rate—of the sterling M3 stock at mid April 1978.