§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what level of capacity working in manufacturing industry he and the Governor of the Bank of England assess as likely to be inflationary. [21312]
§ Mr. NelsonThe level of spare capacity in the economy is one of the many factors that are taken into account in setting monetary policy.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer if it is Government policy to hold down the rate of inflation by raising interest rates and the exchange rate to prevent United Kingdom manufacturers from passing on increases in the cost of imported materials and components. [21590]
§ Mr. NelsonThe Government are committed to delivering permanently low inflation and has an explicit inflation objective. The aim is to keep underlying inflation as measured by the retail prices index excluding mortgage interest payments, in the range 1 to 4 per cent. and to bring it down into the lower half of this range by the end of the present Parliament. Interest rates have been, and will continue to be, set to deliver this objective.