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Fiscal And Monetary Policy

Volume 408: debated on Wednesday 9 July 2003

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To ask the Chancellor of the Exchequer what assessment he has made of the record of effectiveness of (a) fiscal and (b) monetary policy in stabilising the UK economy in the last 30 years. [122151]

The last 30 years saw a history of stop-go in the UK economy. Since the introduction if the new monetary policy framework in 1997 PRIX inflation has fluctuated in the narrow range of 1.5 per cent. to 3.2 per cent. and averaged 2.3 per cent., close to the Government's target. Long-term inflation expectations show that inflation is expected to remain close to the Government's target; and the framework has also dealt successfully with unexpected events.