§ Mr. Austin Mitchellasked the Chancellor of the Exchequer what is his estimate of the effect on the retail prices index after one, two and three years of a reduction of 10 per cent. in the trade-weighted average nominal exchange rate, all other considerations remaining the same.
§ Mr. LilleyThe effects of a change in the exchange rate on the RPI will depend on a number of factors such as the reason for the change and the operation of policy.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer what is his estimate of the effect of the fall in the trade-weighted nominal exchange rate over the past 12 months on the retail prices index compared with the increase in the cost of housing; and if he will provide illustrative figures.
§ Mr. LilleyThe housing component of the RPI, which includes rents, rates and mortgage interest payments among other things, increased by about 10 per cent in the 12 months to June 1987, accounting for about 1½percentage points of the increase in the RPI over this period. For the effect of the exchange rate on the RPI, I refer the hon. Member to the answer I gave earlier today.