§ 37. Mr. David Atkinson
asked the Chancellor of the Exchequer if he will take steps to replace minimum lending rate with a new system.
§ Sir Geoffrey Howe
In my Budget Statement in March this year I told the House that the Bank of England would be holding discussions with financial institutions about the new arrangements for monetary control. These discussions are currently well advanced and when they are finally put into effect the Bank will aim to keep very short-term interest rates within an unpublished band. This will allow market forces to play a greater role in the determination of short-term interest rates. It should in due course be appropriate to suspend the practice of having an announced MLR which will lose its operational significance.