33. Mr. Leeasked the Chancellor of of the Exchequer the principal underlying causes of the increase in the cost of living represented by a 25 point raising of the Index of Retail Prices since October, 1951; and what effect the changed terms of trade since 1950 have had upon our economy.
§ Sir E. BoyleAbout two-thirds of the increase since October, 1951, is due to rises in food prices and one-third to the rise in prices of other items.
The terms of trade varied within the period but at the end of 1955 were slightly worse than in 1950. When they occurred, increases in import prices stimulated in- 44W creases in wages and other home costs which, together with subsequent increases, continue to be reflected in prices today. In the result higher costs in the United Kingdom account for a larger part of the increase in prices over the period than do higher import prices.