§ Mr. Madelasked the Chancellor of the Exchequer what estimate he has made of the effects on employment of the increase in minimum lending rate to 14 per cent.
§ Mr. Joel BarnettNo quantitative estimate has been made. Higher interest rates represent increased costs to borrowers and in general one would expect 203W there to be some adverse impact on expenditure and hence employment. However, since the change in MLR merely brought it into line with other market rates, any effect on employment would be negligible. Indeed, other short-term rates are now lower than they were on 8 February. There would be much greater risk to output and employment if monetary control were to be weakened and the struggle against inflation relaxed.