§ 44. Mr. Bruce-Gardyneasked the Chancellor of the Exchequer what was the rate of increase in the money supply during the last quarter for which figures are available, according to the M1 and M3 definitions, respectively, expressed as an annual rate; and whether this was in accord with the monetary policy of Her Majesty's Government.
§ Mr. NottQuarterly figures expressed on an annual basis are not a reliable indicator of the underlying trend. For instance, in the last three months the rate of increase of M1 expressed on an annual basis was 12 per cent., but the rate of increase expressed on an annual basis in the second calendar quarter was 28.7 per cent. The figure for M3 is 18.4 per cent. The Government's monetary policy is to restrain the growth of money and credit to the amount needed to finance the sound growth of the economy. Since the second quarter, further steps have been taken to restrain monetary expansion.