§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer, pursuant to his answer of 27 April,Official Report, column 646, concerning the effect of the three increases in interest rates between 12 September 1994 and 2 February 1995 (1) what definition he attaches to the words (i) inflation and (ii) low; [23325]
(2) if the Government's objective of permanently low inflation excludes the possibility of a non-low rate of inflation generated by a high rate of growth in the leading sectors of the economy. [23324]
§ Mr. NelsonThe Government's objective is permanently low inflation. The aim is to keep underlying inflation as measured by the retail prices index, excluding mortgage interest payments—in the range 1 to 4 per cent. and bring it down in to the lower half of this range by the end of the present Parliament. Providing a stable macroeconomic environment with low inflation is the best way to ensure sustainable growth in all sectors of the economy.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer, pursuant to his answer of 27 April,Official Report, column 646, concerning the effect of the increases in interest rates between 12 September 1994 and 2 February 1995, what has been the effect of each on the exchange rate. [23326]
§ Mr. NelsonThe exchange rate is determined by many factors. It is not possible to isolate the effect of changes in UK interest rates.