§ Mr. Austin Mitchell
asked the Chancellor of the Exchequer if he will circulate a table in the Official Report showing 375W (a) the rate of monetary growth in the United Kingdom as a percentage of the rate of monetary growth in industrial countries generally, in both cases using the International Monetary Fund definition of money, for the periods 1952 to 1963, 1964 to 1970 and 1971 to 1978 and (b) the corresponding figures for prices; and whether he will make a state-
… … … Industrialised countries* United Kingdom … … … M2† Prices‡ £M3 Prices§ 1952–63 … … … N.A. N.A. N.A. N.A. 1964–70 … … … 9.3 3.7 6.3 3.9 1971–78 … … … 12.1 7.7 14.3 11.9 Date is not available for the period 1952–63. * A weighted basket of the six major OECD countries—USA, Germany, Canada, France, Italy and Japan. † A full and up—to—date series for M3, properly weighted for the various countries, is not readily available and could only be prepared with disproportionate use of resources. The reply therefore shows growth in M2, a somewhat narrower aggregate. M2 has the advantage that for all but Germany it is the aggregate most directly comparable with the United Kingdom measure, £M3. ‡ Consumer prices. § Retail price index.
The relationship between money supply growth and inflation is complex and there is no simple relationship between the two.
Money supply changes do not affect prices immediately and the relationship of monetary growth and prices in different countries will be affected by, inter alia, underlying changes in output and productivity. Inevitably such factors will vary between countries.