§ Mr. Lathamasked the Chancellor of the Exchequer to what extent his policy for reducing interest rates is being handicapped by the strength of the US dollar compared with the £ sterling; and whether he will make a statement.
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§ Mr. Bruce-GardyneThe exchange rate is one of several factors taken into account in reaching decisions on interest rates. Since January of this year sterling's effective exchange rate has remained steady though the dollar has strengthened from around $1.80 to the pound in January to $1.71 on 9 July. But United Kingdom market interest rates, which were around 2 per cent. above comparable rates in the United States at the beginning of the year are now 3 per cent. lower.