§ Mr. Peter Bottomleyasked the Chancellor of the Exchequer what is his estimate of the direct and indirect effects on the public sector borrowing requirement of a reduction in minimum lending rate of 4 per cent.
§ Mr. LawsonThe effect of changes in minimum lending rate on the public sector borrowing requirement depends on whether, and if so how, other interest rates react to the change in MLR and how the economy in general reacts in turn to these other changes in interest rates. It will also depend on any compensating measures the Government are obliged to take to ensure that their monetary targets are achieved. I regret that I cannot therefore give my hon. Friend a reliable estimate.