§ 38. Mr. Haynesasked 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. BrittanUnited 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.