§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what was(a) the forecast and (b) the outturn for (i) M0 and (ii) M4 for 1988 and 1989; what was the cause of the differences between forecasts and outturns; and what assessment he has made of the effects on inflation of both.
§ Mr. RyderOfficial forecasts for M0 and M4 are not published, but target ranges for M0 growth are set out each year in the medium-term financial strategy published in the Financial Statement and Budget Report. The target range for both 1988–89 and 1989–90 was 1 to 5 per cent. M0 growth has fallen gradually since September 1988 as a result of the progressive tightening of monetary policy. M0 is a reliable indicator of monetary conditions; movements in broad money require careful interpretation but are also taken into account in assessing monetary conditions.