HC Deb 21 November 1967 vol 754 c287W
47. Mr. Ian Lloyd

asked the Chancellor of the Exchequer what estimate he has made of the influence which changes in the terms of trade will have on domestic price levels during the next 12 months.

Mr. Callaghan

Devaluation will involve an increase in the sterling cost of our imports, and hence an increase in the cost of living. The influence of devaluation on the cost of living is estimated at approximately 3 per cent.; this should constitute the rise in the cost of living due to increases in import prices in the coming year. Export prices do not affect domestic prices directly, and their indirect effects are negligible.