§ Mr. Denzil Daviesasked the Chancellor of the Exchequer (1) what is the effect of the present high level of bank lending on inflation;
(2) if he will take action to reduce the present high level of bank lending.
§ Mr. LawsonThe key to bringing down the rate of inflation is a progressive reduction in the rate of monetary growth, of which the growth of bank lending to the private sector is one element. The action which the Government have already taken will reduce the growth of bank lending in due course. While the position is kept closely under review, further action now would not be justified.