§ Mr. Gouldasked the Chancellor of the Exchequer what contribution the appreciation of the £ sterling has made to the reduction of the inflation rate over the past year; if the contribution can be quantified; how it compares with the 63W effects of other factors such as stable or falling world commodity prices, the pay policy and low interest rates.
§ Mr. Robert SheldonThe full effects of the recent appreciation of the £ sterling have not yet fed through into retail prices, and so its contribution to the reduction in the rate of inflation is as yet small. It cannot be quantified, but it appears that more significant have been the effects of pay policy, the lower prices of seasonal foods due to recovery from the 1976 drought, and the fall in interest rates.