§ Mr. Watkinsonasked the Chancellor of the Exchequer what the change in domestic credit expansion has been on 993W a monthly basis and three-monthly basis for 1976.
§ Mr. Denzil DaviesI would refer my hon. Friend to the answer I gave to the hon. Member for mid-Sussex (Mr. Renton) on 1st July—[Vol. 914, c.263]. The figure for domestic credit expansion in the second quarter of 1976 will be published in the September Bank of England Quarterly Bulletin.
§ Mr. Watkinsonasked the Chancellor of the Exchequer what is his definition of domestic credit expansion.
§ Mr. Denzil DaviesDomestic credit expansion is defined in detail in the notes to Table 12 of the Bank of England Statistical Abstract (1975) and the Notes and Definition to Financial Statistics (April 1976). In broad terms, it equals the public sector borrowing requirement, less sales of public sector debt to the general public outside the banking system, plus bank lending to the private sector. It can be regarded either as this measure of credit creation or as a measure of changes in the money supply adjusted for external factors. The two approaches produce the same figure for DCE because of the accounting identity of the banking sector's liabilities and assets.
§ Mr. Watkinsonasked the Chancellor of the Exchequer what was the change in DCE in 1975 and 1974; and what was the change compared to changes in the money supply in the same year.
§ Mr. Denzil DaviesIn 1975 domestic credit expansion was £4,780 million; in 1974 it was £7,540 million. These compare with changes in the money stock, M3, of £2,915 million in 1975 and £4,221 million in 1974.