§ Mr. Gouldasked the Chancellor of the Exchequer to what cause he attributes the fact that the United Kingdom's export prices for manufactured goods have fallen no faster than those of the United Kingdom's main competitors, apart from the Americans, in the 12 months ended June 1976; and whether this accounts for the relatively poor export figures for manufactures.
§ Mr. Robert SheldonThe answer to the first part of the Question is that our rate of inflation has continued to exceed that of our main competitors and that our exporters have chosen to take a considerable part of the benefit of recent depreciations in the form of higher profit margins on export sales rather than adjust their foreign currency prices for exports. As to the second part of the Question, there are believed to be long lags between changes in relative export prices and the full effects on trade volumes, and recent movements in exports can at best be only partially explained in terms of changes in our competitive position over the period mentioned.