HC Deb 23 December 1982 vol 34 cc655-6W
Mr. Deakins

asked the Chancellor of the Exchequer what is the correlation between changes in the trade balance in manufactured goods between the United Kingdom and each of the other European Economic Community member States between May 1979 and the latest available date and the changes in the exchange rate of the £ sterling against the currency of the relevant States over the same period.

Mr. Bruce-Gardyne

Changes in the nominal exchange rate between the currencies of two trading partners are only one of a number of factors affecting changes in their bilateral trade balance. Other influences are changes in the level and composition of demand in the two countries and differences in their rates of inflation. These other factors influence also the reverse relationship which runs from changes in bilateral trade balances to changes in bilateral exchange rates.