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Minimum Lending Rate

Volume 986: debated on Thursday 19 June 1980

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asked the Chancellor of the Exchequer what working assumption is made by Her Majesty's Treasury within its econometric model, or generally, of the effect of a change in the public sector borrowing requirement equivalent to 1 per cent. of gross domestic product upon the level of the minimum lending rate.

The effect of changes in the public sector borrowing requirement (PSBR) on interest rates depends on the cause of the initial change and on the response of expectations. The hon. Member may pursue the question via access to the Treasury model through the Library of the House.