§ Ms. HarmanTo ask the Chancellor of the Exchequer what assessment the Treasury has made as to the causes of the recent pressure on sterling and the degree to which it reflected (a) speculation and (b) underlying economic factors.
§ Mr. NelsonThe main underlying cause of tensions in the ERM has been the persistence of high interest rates in Germany, imposed to counter the inflationary effects of reunification, combined with the lowest interest rates in 30 years in the USA. Speculation, in the lead-up to the French referendum, caused these tensions to come to a head on 16 September.
§ Ms. HarmanTo ask the Chancellor of the Exchequer if he will now accept the recommendations of Session 1988–89 from the third report of the Treasury and Civil Service Committee on international monetary coordination (HC 384) about making public the amount of the intervention, gains and losses to the United Kingdom Exchequer of measures to support the pound sterling.
§ Mr. NelsonNo.