HC Deb 18 January 1995 vol 252 cc493-4W
Mr. Austin Mitchell

To ask the Chancellor of the Exchequer (1) what was the lowest rate of exchange between the pound sterling and the deutschmark in February 1993; and what has been the change in the rate of the pound sterling against(a) the deutschmark (b) the ecu and (c) the dollar since then;

(2) what part, a desire to protect the value of the pound sterling fully against other EEC currencies played in the uneven interest rates this year;

(3) if (a) pound sterling and (b) the dollar are overvalued; and how over valuation is to be measured;

(4) what was the percentage reduction in the value of the pound sterling against the ecu and against non-ecu currencies included in the Bank of England index since August 1992;

(5) what conclusion he has drawn from Britain's membership of the ERM of the EMS.

(6) if he will publish an assessment of the effects of Britain's membership of the ERM on (a) jobs, (b) growth, (c) manufacturing and (d) the balance of payments.

Mr. Nelson

Movements 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 we do not set target rates. The valuation of any currency is determined by transactions in the foreign exchange markets.

The United Kingdom's membership of the ERM demonstrated that, for currency mechanisms to achieve greater exchange rate stability, broader economic convergence between member states is required.

Levels of employment, growth, manufacturing output and the balance of payments are affected by a wide range of factors; it is not possible to isolate the effects of any single factor.

Sterling's exchange rates against ecu and non-ecu currencies are published in table 7.1A of the Central Statistical Office's "Financial Statistics".