§ Mr. Ron Thomasasked the Secretary of State for Prices and Consumer Protec- 692W tion if he will list in the Official Report those items in the index of retail prices which rose in price due to an increase in the money supply (M3), or an increase in domestic credit expansion, in the years 1975, 1976 and 1977.
§ Mr. Denzil DaviesI have been asked to reply.
It is not possible to trace a direct relationship between the monetary aggregates and the price of specific items, since monetary growth influences the general level of demand in money terms rather than individual costs. Over the years to which my hon. Friend refers, the Government's control of the money supply has made an important contribution towards the progressive deceleration of inflation.