§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer if he will make a statement on the relationship between international competitiveness and purchasing power parities. [26543]
§ Mr. NelsonImproving price competitiveness tends to be associated with appreciating purchasing power parity exchange rates for any given nominal market exchange rate. In general, the concept of competitiveness embraces much more than relative prices. Among other factors, relative costs, product quality, marketing and after-sales service are also important.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what priority he accords to the need for British goods to compete on price at home and abroad in evaluating advice he receives on monetary policy from the Governor of the Bank of England. [27018]
§ Mr. NelsonEconomies function most effectively in conditions of low and stabled inflation. Low inflation also helps to keep British goods and services competitive. Interest rates are set to deliver low inflation. Underlying inflation has now been below 3 per cent. for 19 consecutive months, the longest such period since 1961.