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Exchange Rates

Volume 163: debated on Monday 4 December 1989

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To ask the Chancellor of the Exchequer what effect the increase since January 1987 in both the nominal and real exchange rates against the D-mark has had on manufacturing capacity and on the future rate of growth in terms of the balance of payments constraint; and whether this has led him to revise the Treasury model of the economy.

The level of manufacturing investment (including leased assets) in 1989 quarter 3 is provisionally estimated to be about 38 per cent. higher than in 1987 quarter 1; and its cumulative growth over this period has added substantially to manufacturing capacity. The Treasury model is updated when necessary in the light of latest data.