Oral question asked in the House of Lords, by Lord Barnett (Labour). It was answered on Monday, 19 January 2009.

Economy: Exchange Rate

Question: My Lords, I think that I thank my noble friend; I am not sure that that answers my Question. Does he accept that the depreciation of the currency is positively helpful as a step towards economic recovery in the sense that it will help to get us out of the recession rather quicker than would have been the case without that correction of the currency? Can he assure us that he will leave the currency to find its own level and not seek to manage it in some strange way that I am not sure about?

Answer: My Lords, the adjustment that we have seen in the value of sterling should be helpful to British exporters, including, in particular, the very large manufacturing sector, to which my noble friend Lady Whitaker referred last week. It should also mean that opportunities emerge for domestic manufacturers to supply domestic demand which has previously been met by production from overseas. I assure my noble friend that the Government’s monetary policy will continue to pursue the framework that has successfully been in place since 1987—namely, to target inflation and not an exchange rate.

Secondary information

Type: Oral question
Reference: 706 c1440
Session: 2008-09
Oral question type: 1st Supplementary
Chamber / Committee: House of Lords chamber
Subjects: Economic situation Monetary policy Sterling Exchange rates Currency realignment
Link: View this Oral question on www.publications.parliament.uk