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Volume 978: debated on Wednesday 6 February 1980

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asked the Chancellor of the Exchequer to what extent inflation has risen from May 1979 until the latest most convenient stated date; to what extent this increase has been due directly or indirectly to Government action; and whether he will detail these actions giving an actual or estimated figure for the rises due to such actions in each case.

The rate of increase over the year to May 1979 in the RPI was 10·3 per cent., and in the TPI 12·7 per cent. The rate of increase over the year to December 1979 in the RPI was 17·2 per cent., and in the TPI 14·9 per cent. Most of the economic decisions of any Government, whether decisions about broad fiscal and monetary policy or decisions about specific prices, affect inflation. The effects of many of them take time to come through into inflation. Many of the price increases after May 1979 resulted from events and policies during the previous Government's term of office. The present Government's monetary and fiscal policies, while involving some short-term price increases, will in time work through into lower inflation.