§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what assumptions on the future level of the value of the pound have been made in the pre-Budget report, November 1998, in order to derive forecasts for the growth of UK exports over the period from 1999 to 2002; and if he will make a statement. [59416]
§ Ms Hewitt[holding answer 12 November 1998]: As stated in the Pre-Budget Report, the Treasury's latest forecast assumes that the sterling exchange rate moves in line with an uncovered interest parity condition, consistent with the interest rates underlying the economic forecast.
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what is his estimate of the direct effect on UK GDP growth in 1998 compared with 1997 of the slowdown in the rate of growth of UK export markets; and if he will make a statement. [59420]
§ Ms Hewitt[holding answer 12 November 1998]: The Pre-Budget Report forecast published on 3 November shows UK export market growth slowing from 10½ per cent. in 1997 to 7¼ per cent. in 1998. On its own, this would have tended to reduce GDP growth between 1997 and 1998 by around 1 percentage point, before allowing for knock-on effects on domestic demand. The Pre-Budget Report forecast for GDP growth takes full account of all other relevant factors.
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer if he will estimate the proportion of the slowdown in export growth from the 1997 level attributable to(a) decline in UK export market growth and (b) decline in competitiveness, for each of the years (i) 1998, (ii) 1999, (iii) 2000 and (iv) 2001. [59417]
§ Ms Hewitt[holding answer 12 November 1998]: The major part of the forecast deceleration in UK exports of goods and services between 1997 and 1999 can be 363W accounted for by deceleration in UK export markets growth. After 1999, growth of UK export markets is forecast to pick up. Relevant figures are set out in the Pre-Budget Report published on 3 November.