§ Mr. Ian Stewartasked the Chancellor of the Exchequer (1) on what criteria he based his judgment that the parity of sterling had been carried on to an unjustified level, 7th June (Official Report, c. 914);
(2) whether his discussions in Puerto Rico confirmed his statement on 9th June (Official Report, c. 1554) that the standby credit was provided for the United Kingdom solely because the recent behaviour of the foreign exchange markets was impossible to justify by economic argument.
§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 5th July 1976; Vol. 914, c. 419, 420], gave the following information:
Much of the pressure on sterling in the period after early March related to the differential between our inflation rate and 524W that of our principal trading partners. But in some phases, the downward pressure developed a momentum of its own unrelated to underlying economic conditions, and threatened to trigger more widespread market disruption. This is why the standby credit was negotiated and nothing has happened since that time to modify my view of the appropriateness of this arrangement.