§ 38. Mr. Haynes
asked the Chancellor of the Exchequer if he expects the present trend of the public sector borrowing requirement and falling interest rates in the United States of America to have a downward effect on United Kingdom interest rates.
§ Mr. Brittan
United Kingdom rates have already fallen significantly since last autumn and are now appreciably lower than rates in the United States. Clearing bank rates are 12½ per cent.—United States Prime rate 16½ per cent. The lower than forecast outturn on the public sector borrowing requirement in 1981–82 does not necessarily presage a lower outturn in 1982–83, and it is the 1982–83 borrowing requirement that influences interest rates this year. Lower United States interest rates would certainly be a welcome development. But United Kingdom interest rates are determined in the light of domestic financial conditions generally.