Written question asked by Lord Redwood (Conservative) on Thursday, 15 January 1998, in the House of Commons. It was due for an answer on Wednesday, 21 January 1998. It was answered by Baroness Liddell of Coatdyke (Labour) on Wednesday, 21 January 1998 on behalf of the Treasury.

Treasury

Question: To ask Mr Chancellor of the Exchequer, what interest rate increase would be needed to keep to the inflation target if earnings rise by 1 per cent. more than the Government's forecast. - (Holding answer 20 January 1998).

Answer: Mr. Redwood: To ask the Chancellor of the Exchequer what interest rate increase would be needed to keep to the inflation target if earnings rise by 1 per cent. more than the Government's forecast. [24296] Mrs. Liddell: [holding answer 20 January 1998]: Interest rates are set by the Monetary Policy Committee (MPC) of the Bank of England to meet the Government's inflation target of 2 1/2 per cent. The MPC bases its interest rate decisions on a range of evidence, and its response to higher than expected earnings growth would depend on how it affected the outlook for inflation.

Secondary information