Below is the text of Mr Major’s written Parliamentary Answer on Interest Rates on 26th January 1988.
Mr. Austin Mitchell To ask the Chancellor of the Exchequer what estimate he has made of the correlation between interest rates and the public sector borrowing requirement from 1979 to 1987.
Mr. Major My right hon. Friend the Chancellor has made no estimate. United Kingdom interest rates are influenced by numerous factors including interest rates abroad, inflationary expectations, financial innovation and private sector borrowing, in addition to public sector borrowing. Consequently, simple correlations between interest rates and the public sector borrowing requirement are uninformative.