HC Deb 23 February 1989 vol 147 c773W
42. Mr. Knox

To ask the Chancellor of the Exchequer what assumptions on future rises in interest rates he is making in drawing up his Budget proposals.

Mr. Lilley

The Government never publish assumptions about future levels of interest rates.

46. Mr. McFall

To ask the Chancellor of the Exchequer what effect current interest rates are having on(a) business investment and (b) mortgage payers.

Mr. Lilley

Surveys from the CBI and from the Department of Trade and Industry show that strong investment growth is expected to continue. Higher mortgage interest rates mean that mortgage payers have, for a period, to curb expenditure on other things. This is one of the ways in which they reduce inflationary

Growth of whole economy productivity (percentage change on a year earlier)
USA Japan France Germany Canada Italy United Kingdom 1G7
1981 1.2 3.0 1.8 0.9 -5.8 0.9 2.2 1.3
1982 -1.7 1.8 2.4 1.1 6.7 0.6 4.3 0.6
1983 2.6 1.4 1.0 3.1 5.5 0.8 4.2 2.4
1984 2.9 4.4 2.2 2.6 2.0 2.8 1.0 2.9
1985 1.7 4.0 2.0 1.3 0.3 2.4 2.0 2.1
1986 0.7 1.6 1.9 1.3 1.1 2.4 2.4 1.3
1987 0.9 3.3 2.0 1.2 0.9 3.3 2.9 1.8
2 1988 1.7 4.2 3.0 2.9 -2.6 2.4 2.6 2.4
Period average 1.2 3.0 2.0 1.8 1.0 2.0 2.7 1.8
1 Weighted average.
2 The estimates for 1988 compare with the average level of productivity in the first three quarters (except for France, for which data for the first half of 1988 only are available) with the average level in 1987 as a whole.

Source: OECD, CSO.