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Interest Rates

Volume 979: debated on Tuesday 26 February 1980

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asked the Chancellor of the Exchequer what is his estimate of the amount by which interest rates have had to be raised on account of the abolition of exchange controls.

To the extent that the relaxation of exchange controls induces a net outflow from the non-bank private sector, there would be a tendency for the level of nominal interest rates consistent with a given monetary target to fall somewhat. But there are other factors, tending to work in the opposite direction, and it is not possible to place a precise number on the likely overall effect.