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Prices And Purchasing Power

Volume 895: debated on Thursday 17 July 1975

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asked the Chancellor of the Exchequer what is his estimate of the effect on prices and the purchasing power of the pound as compared with the present time of the Government's proposed limit of an extra £6 a week on incomes during the coming year.

Strict adherence to the £6 limit will enable us to meet our price target of a year-on-year increase of 10 per cent. in the retail prices index by the third quarter of 1976, provided there is no major surge in import prices over which we have no control. On this assumption, the purchasing power of the pound will be about 91p in the third quarter of next year compared with its value in the third quarter of this year.