§ Mr. Gouldasked the Chancellor of the Exchequer to what extent the raising of the price of sterling by the Bank of England in the first quarter of 1975, when United Kingdom interest rates were much higher than in other countries, and when prices of United Kingdom manufactured goods were rising faster than those of competitors, was responsible for the later deterioration in the country's trading position.
§ Mr. Robert SheldonThe small rise in the effective exchange rate of sterling in the first quarter of 1975 reflected the weakness of the dollar in that quarter. However, our export price competitiveness probably changed little during the quarter and our ability to compete with imports fell only temporarily so that any subsequent effects on the trade balance are likely to have been small.