Lord Bruce of Doningtonasked Her Majesty's Government:
By how much would the retail prices index (taking that to be published on 20th May 1988 as the relevant figure) be reduced on the assumption that the weekly expenditure on food of an average family of four was reduced in price by £10.50 per week and, on the further assumption that this price reduction continued for 12 successive months, what its effect would be on the annual rate of inflation.
§ The Secretary of State for Trade and Industry (Lord Young of Graffham)The effect of price reductions saving the average household £10.50 per week would be to reduce the retail prices index by 5.7 index points (January 1987=100). If these were maintained for the next 12 months the annual rate of inflation would be reduced by about 5½ percentage points throughout. For example, the April 1988 figure published on 20th May would have been minus 1.7 per cent. instead of 3.9 per cent.