HC Deb 06 November 1980 vol 991 cc637-8W
2. Mr. Dykes

asked the Chancellor of the Exchequer if he is satisfied that the ending of the corset controls on banking assets in July has now worked through the measured money supply figures.

20. Mr. Richard Wainwright

asked the Chancellor of the Exchequer whether he considers the most recent figures for sterling M3 accurately record the overall growth of money supply.

Mr. Lawson

The extent of distortions caused by the corset imposed by the right hon. Member for Leeds, East (Mr. Healey) in 1978 cannot be measured with precision. The money supply figures for banking July and August were certainly significantly affected by reintermediation after the ending of the corset. This may have accounted for between 4 and 6 per cent. of the 8 per cent. recorded growth and thus the underlying monetary growth was significantly less than the recorded figures. The figures for banking September and October were probably less affected, but we still cannot be absolutely sure that all the distortions have now worked themselves through.

6. Mr. Hal Miller

asked the Chancellor of the Exchequer whether the money supply is now on target.

21. Mr. Brotherton

asked the Chancellor of the Exchequer if he is satisfied with the rate of growth of the money supply.

Sir Geoffrey Howe

Not yet. But there are a number of reasons for expecting the rate of growth to be much lower in the second half of the year.

11. Mr. William Hamilton

asked the Chancellor of the Exchequer if he is satisfied with the progress made in controlling the money supply; and when he expects his policy in this respect to result in reductions in interest rates.

Sir Geoffrey Howe

I refer the hon. Member to my earlier replies to the Members for Harlow (Mr. Newens) and for Bromsgrove and Redditch (Mr. Miller).