§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what economic role he assigns to(a) the rate of interest and (b) the rate of exchange in the conduct of economic policy.
§ Mr. NelsonIt is the role of monetary policy to deliver low inflation. Since monetary policy influences inflation with a lag, interest rate decisions are based on an assessment of the prospects for underlying inflation in one to two years' time. This assessment is based on a wide range of information including movements in the exchange rate.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what was the effect of the rise in the rate of exchange against the Deutschmark between February 1993 and January 1994 on the standard of living of manual workers in manufacturing industry relative to those of white-collar workers in the private sector.
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§ Mr. NelsonIt is not possible to isolate the effects of nominal exchange rate changes on standards of living.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what has been the effect of the Government's exchange rate policies on the distribution of incomes since 1979.
§ Mr. NelsonThe distribution of income depends on a number of different factors. It is not possible to identify the effect of any single factor.