HC Deb 03 June 1997 vol 295 cc146-7W
Mr. Jack

To ask the Chancellor of the Exchequer if he will list which of the economic indicators for which his Department receives data he will take into account when assessing interest rate policy. [1872]

Mrs. Liddell

[holding answer 2 June 1997]The Chancellor has transferred the operational responsibility for setting interest rates to the Bank of England.

Mr. Jack

To ask the Chancellor of the Exchequer at present levels of economic activity, at what amount interest rates would have to be set to achieve levels of inflation of(a) 2.4 per cent., (b) 2.3 per cent., (c) 2.2 per cent., (d) 2.1 per cent. and (e) 2.0 per cent. by the end of March 1998. [1871]

Mrs. Liddell

[holding answer 2 June 1997]: The mechanisms by which interest rates affect the inflation rate are quantitatively uncertain and may be influenced by unforeseen events reflecting the time lags involved. Therefore it is not possible to be sure about the precise level of interest rates required to hit an exact inflation rate ten months ahead.

Mr. Jack

To ask the Chancellor of the Exchequer, pursuant to his oral statement of 20 May,Official Report, column 508, what are his growth objectives for the British economy for its financial years 1997–98, 1998–99, and 1999–00; and if he will state his employment objectives, (a) numerically and (b) descriptivity, for the same financial years. [1864]

Mrs. Liddell

[holding answer 2 June 1997]: The Government's central economic objectives are high and stable levels of growth and employment. The Government do not intend to set numerical targets for growth and employment.

Mr. Jack

To ask the Chancellor of the Exchequer, pursuant to his oral statement of 20 May,Official Report, column 508, what are the numerical targets of the Government's economic policy for the key indicators to monitor. [1863]

Mr. Geoffrey Robinson

[holding answer 2 June 1997]: The Chancellor will set out the Government's approach to monetary policy in his Mansion House speech on 12 June. The Government regard price stability as an essential pre-condition for high and stable levels of growth and employment. Sound public finances are also important for lasting economic stability. The Government's fiscal policy will be spelt out in the Budget.

Mr. Jack

To ask the Chancellor of the Exchequer by what means he proposes to resolve any incompatibility between the Bank of England's monetary policy objective of price stability and the Government's growth and employment objectives. [1865]

Mrs. Liddell

[holding answer 2 June 1997]: The monetary policy objective of the Bank of England will be to deliver price stability (as defined by the Government's inflation target) and, without prejudice to this objective, to support the Government's economic policy, including their objectives for growth and employment. Price stability is the best way that monetary policy can contribute to achieving high and stable levels of growth and employment in the long run.

Mr. Jack

To ask the Chancellor of the Exchequer, pursuant to his oral statement of 20 May,Official Report, column 509, what is his definition of (a) extreme economic circumstances and (b) a limited period; and if he will make a statement covering both the numerical and descriptive aspects of these matters. [1869]

Mrs. Liddell

[holding answer 2 June 1997]: Further details will be made available when the draft Bill is introduced into the House.