HC Deb 19 December 1994 vol 251 c940W
Mr. Austin Mitchell

To ask the Chancellor of the Exchequer if he will make a statement on the present level of the exchange rate; and what is his assessment of its effects on competitiveness.

Mr. Nelson

Movements in the exchange rate are considered as part of the general assessment of monetary conditions in setting monetary policy. The Government recognise the value of a stable exchange rate but do not set target rates. The United Kingdom is very competitive, as demonstrated by our strong export performance; in the third quarter of 1994 export volumes—excluding oil and erratics—were up 14 per cent. on a year earlier.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer what criteria are used by the Government in assessing whether the exchange rate is correctly valued.

Mr. Nelson

The Government do not have a target rate for sterling. Movements in the exchange rate are considered as part of the general assessment of monetary conditions in setting monetary policy.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer what has been the change in the exchange rate of(a) pound sterling and (b) the lira against the ecu and non-ecu currencies since August 1992; and what has been the change in (i) the United Kingdom non-oil balance of trade and (ii) the Italian visible balance of trade in the first half of the current year with the EEC and non-EEC countries.

Mr. Nelson

Exchange rate data can be found in the CSO publication "Financial Statistics".

The United Kingdom's non-oil trade deficit with other EU member states widened by some £300 million in the first half of 1994 compared to the same period a year before; while the trade deficit with countries outside the EU narrowed by £600 million over this period. However, the improvement in the third quarter of 1994 has been marked: the deficit with other EU countries narrowed by around £500 million, compared with the second quarter of 1994; and the deficit with non-EU countries narrowed by some £600 million. Italy's visible trade surplus with other EU countries was largely unchanged between the first halves of 1993 and 1994, but increased by £2.5 billion on trade with non-EU members.