§ Mr. Austin Mitchell
To ask the Chancellor of the Exchequer (1) if he will publish in table form the change in the money supply for each year since 1976 and the change in the rate of inflation two years later;
(2) what was the change in the broad money supply for each year since 1972; what is his estimate of the proportion of that change directly attributable to (a) the banks, (b) the building societies and (c) the balance of payments;
(3) what figures he has for the supply of broad money in the United Kingdom and the rate of inflation for each year since 1979; and what assessment he has made of the degree of correlation between them;
(4) if he will publish a table showing for each year since 1976 the percentage change in the money supply in (a) the United Kingdom and (b) West Germany;
(5) what was the increase in the money supply, broadly defined, since May 1979; and how much of it was created by Government and how much by other agencies.
§ Mr. Nelson
Monetary policy is conducted so as to deliver low inflation. Monetary policy decisions are based on an assessment of a range of monetary and other indicators, including narrow and broad money. However, the Government do not rely on any single indicator.
The Treasury published a detailed assessment of broad money in the autumn 1991 edition of the "Treasury Bulletin". The Government have also set a monitoring range for M4. But experience indicates that the relationship with future inflation is not sufficiently close to justify establishing M4 as a formal target.
Figures for retail price inflation, narrow and broad money in the United Kingdom since 1972 can be found in the Central Statistical Office's Economic Trends. More 571W detailed figures for the money supply—and its components and counterparts—can be found in the Bank of England's "Statistical Abstract" and in its "Quarterly Bulletin". West German money supply figures are available in the International Monetary Fund's "International Financial Statistics". Copies of all these publications are in the House Library. The relationship between the balance of payments and the overseas contribution to broad money growth is described in special articles in the Bank of England's "Quarterly Bulletin" December 1978 and December 1983 editions and in the Central Statistical Office's "Financial Statistics" explanatory handbook.