HC Deb 19 July 1983 vol 46 c104W
Mr. Gould

asked the Chancellor of the Exchequer what effect he expects a fall in the rate of inflation in the United Kingdom relative to other countries to have on the exchange rate, all other things being equal.

Mr. Moore

Knowledge of the determinants of exchange rates is uncertain, and what happens to the exchange rate after a change in one of its determinants will depend crucially on the circumstances holding at the time and on expectations of future developments. A fall in the United Kingdom inflation rate relative to world inflation could, to the extent that it had not been anticipated, lead to a rise in the exchange rate, other things being equal. It is probably not, in general, valid to assume that other things will be equal.