§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer (1) what steps the Government are taking to prevent inflation in asset prices from spreading to goods and services;
(2) what assessment the Government have made of the inflationary effect of increases in house prices; and what steps the Government intend to take to prevent house prices from rising further in 1994.
§ Mr. NelsonThe Government are committed to low inflation and will continue to conduct monetary policy so as to deliver their inflation target.
456WMonetary policy decisions are based on assessments of a range of monetary and other indicators, including house prices and other asset prices. Asset price movements have in the past been valuable leading indicators of inflation, but the Government do not rely on any single indicator.
As stated in the 1994–95 "Financial Statement and Budget Report," while some recovery in house prices is expected in 1994, inflation is still forecast to remain within the Government's target range.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer to what extent the Government distinguish between asset inflation, cost-push inflation and demand-pull inflation for the purposes of fiscal and monetary policy; and which of the three principally characterised inflation between 1987 and 1990.
§ Mr. NelsonThe Government's monetary policy is set to deliver low inflation irrespective of its cause. Figures on a wide range of monetary and other indicators are monitored, including asset prices, earnings, other input prices and activity. These are published regularly in the monthly monetary report, which has included charts for the period referred to.