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Inflation (Exchange Rate)

Volume 35: debated on Thursday 27 January 1983

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23.

asked the Chancellor of the Exchequer what effect he estimates the fall in the exchange rate will have on inflation in 1983.

The effect of the recent fall of sterling on inflation will depend on a variety of factors. For example, it will depend on how long the fall is sustained, how far importers restrict price rises, and how far British producers contain their costs through more efficient operations and continued moderation in wage settlements. We remain confident of achieving 5 per cent. inflation early this year.