§ Mr. Dubsasked the Chancellor of the Exchequer what relationship there is between the growth of the money supply (M3) in 1980 and 1981 and the present rate of inflation.
§ Mr. Bruce-GardyneThe current reduction in the rate of inflation in large measure reflects the maintenance of appropriately restrictive monetary conditions in 1980–81. The Government have frequently stated that monetary conditions cannot be assessed solely by looking at one monetary aggregate. For this reason the target range now applies to both broad and narrow aggregates and account is taken of a range of financial indicators including the exchange rate, real interest rates and asset prices.