§ Mr. Moonmanasked the Chancellor of the Exchequer what studies have been initiated by Her Majesty's Government relating to the movement of capital by the Arab States and its possible effect on the United Kingdom and the European Economic Community.
§ Mr. Robert SheldonFuture capital accumulation by the oil producers 603W depends on the size of their current account surpluses. Forecasts of these are an important ingredient in the Treasury's regular assessment of world economic prospects. The prospect is for a continuing and sizeable OPEC surplus, which has major economic implications for the world economy, above all for the developing countries. Now that the reserves are strengthened and the new arrangements for the official sterling balances are in place, there seems no reason to expect that the financial flows associated with these payments imbalances will cause particular problems for the United Kingdom. But we certainly do not wish to encourage additions to external holdings of sterling in private hands and, as the House is aware, we are seeking to reduce the level of official holdings.