§ Mr. Gouldasked the Chancellor of the Exchequer what was the average base rate for each quarter from 1979 onwards; and what real rate of interest this represented in each case; and how these figures compare with those for the United States, Japan, Germany and Australia.
§ Mr. Ian Stewart[pursuant to his reply, 11 March 1985, c. 60]: Quarterly data for average United Kingdom base rates appear in "Financial Statistics." Interest rates relevant to bank lending in other countries are published in the OECD's "Financial Statistics Monthly." Since the structure of bank lending varies between countries, there is no guarantee that these interest rates are comparable with United Kingdom base rates.
For Australia and Germany the rates published by the OECD are average rates on particular categories of bank lending. For the United States and Japan they are reference rates similar in concept to United Kingdom bank rate, that is rates which serve as the basis for the pricing structure of bank loans in that country. Even among the latter group, comparison may be complicated by significant differences with regard to both the average maturity of bank lending and the size of the mark-up over the reference rate on the average loan.
Many problems arise in converting data for nominal interest rates into a measure of real interest rates. Some of the issues involved were discussed in an article in the December 1983 Bank of England Quarterly Bulletin, 188W which also presented estimates for a number of countries.