§ Mr. Gouldasked the Chancellor of the Exchequer what effect sterling lending to the private sector over the past 12 years has had on the rate of inflation; and whether he will publish in the Official Report a table showing for each year since 1970 and the current year to date (i) the 449W percentage increase in sterling lending to the private sector, (ii) the degree of overfunding as a percentage of such lending and (iii) the increase in the rate of inflation.
§ Mr. LawsonIt is not possible to quantify the effect of sterling lending to the private sector on inflation. sterling lending to the United Kingdom private sector is one counterpart to the change in sterling M3, though there is no simple relationship between the two. In recent years the economic significance of both sterling lending and sterling M3 has been affected by the operation and abolition of the supplementary special deposits scheme and by structural changes in financial markets.
Figures for the increases in sterling lending to the United Kingdom private sector, seasonally adjusted, for the years 1970 to 1981, are shown on page 148 of the 1983 "Economic Trends" annual supplement. Figures for later quarters are shown on page 54 of the most recent edition of "Economic Trends". The seasonally adjusted level of sterling lending to the United Kingdom private sector at end-1969 was 9.1 billion. There have been minor breaks in the series subsequently, and a major break at end-1981; the seasonally adjusted level at end-1981 after the break was £70,290 million. The public sector's net funding position is obtained by summing the first four columns of the tables on the pages to which I refer above. Annual values of the retail prices index are given on page 114 of the 1983 "Economic Trends" annual supplement; and for later periods on page 42 of the latest edition of "Economic Trends".