§ Mr. Austin Mitchellasked the Chancellor of the Exchequer if he will estimate the effect the increase in minimum lending rate in 1985 will have on inflation.
§ Mr. Peter Rees[pursuant to his reply, 20 February 1985, c. 494]: The Bank of England on 20 August 1981 ceased to post a continuous minimum lending rate. It announced a minimum lending rate of 12 per cent. on 14 January for that day only.
The increase in building society mortgage rates in February may cause some temporary upward movement in inflation as measured by the RPI. However the longer term effect of the rise in interest rates this year will be to contain inflationary pressures.