§ Mr. Austin Mitchellasked the Chancellor of the Exchequer what increase in the money supply would be required during its current year to reflect (a) growth in the gross national product and (b) the rate of price inflation; and how this compares with the target increase.
§ Mr. LawsonThe Government's forecasts are for (a) a decline in GDP of 2½ per cent. in 1980 compared with 1979; and (b) an increase in the RPI of 16½ per cent. over the 12 months to the fourth quarter of 1980, reducing to one of 13½ per cent. over the 12 months to the second quarter of 1981.
Monetary growth in the centre of the 7 to 11 per cent. target range would be wholly consistent with these forecasts.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer whether he will revert to expressing the monetary targets in terms of domestic credit expansion.
§ Mr. LawsonNo. I refer the hon. Member to the Green Paper on monetary control (Cmnd. 7858), paragraphs 8 to 11.