asked the Chancellor of the Exchequer if he will show under which monetary aggregate the Bank of England's purchases of commercial bills is included; and if he will describe the effect that such purchases have on monetary policy.
The information on Bank of England purchases of commercial bills is to be found in Financial Statistics, table 7·3. Sterling lending to the United Kingdom private sector is the sum of lending in sterling to the private sector by the monetary sector (ie. recognised banks and licensed deposit takers) plus Issue Department holdings of commercial bills. Thus purchases of commercial bills appear not as part of a monetary aggregate but as one of the domestic counterparts to changes in the money stock.The implications for monetary policy of such purchases were described in the note on bank lending, "Overfunding and Money Market Assistance," submitted by the bank to the Treasury and Civil Service Committee, and reprinted as appendix 8 of the latter's fourth report.