§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what assessment he has made of the effects on Britain of withdrawal from the exchange rate mechanism and what plans he has to restore the rate of exchange against the deutschmark to its August 1992 value.
§ Mr. NelsonIt is not possible to assess the precise effects of sterling's departure from the ERM. However, during sterling's membership of the ERM, inflation fell sharply and the economy began to recover from recession. The Government recognise the value of stable exchange rates but do not set target rates. Movements in exchange rates are considered as part of the Government's general assessments of monetary conditions in setting monetary policy.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer (1) if he will make a statement on the current rate of exchange of the sterling against the ecu;
(2) if he will make a statement on the role of the exchange rate in the economy.
§ Mr. NelsonMovements in the exchange rate are considered as part of the general assessment of monetary conditions in setting monetary policy. The Government recognise the value of a stable exchange rate but do not set target rates. Sterling's exchange rate against the ECU reflects day-to-day market trading in all the EU currencies.
1071WThe exchange rate is only one factor among many affecting the economy, and it is difficult to isolate the effect of changes in the exchange rate from that of other factors.