§ Mr. Tim Rentonasked the Chancellor of the Exchequer to what factors he attributes the decline in the external value of the £ sterling during 1976.
§ Mr. Robert SheldonThe three major factors underlying the pressure on sterling this year have been the very large current and structural capital account deficit; the substantial reduction in sterling balances held by non-residents; and the differential between the United Kingdom inflation rate and that of our principal competitors. Other factors such as speculative selling from non-resident sources and, probably, some leading and lagging of commercial payments have added to downward pressure in particular phases, but such factors have generally been of lesser importance than the three mentioned above.