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The Economy

The hon. Gentleman is right to say it is important to support consumer confidence. We have to do more to put more money in people’s pockets at a difficult time and to help to support the economy in different ways. That is the approach that we are taking, through both monetary and fiscal policy. Sadly, it is not supported by his party. Let us go through this. The Conservative party is the only party in Europe that refuses to back extra Government fiscal action to help our economy. Yesterday, the Governor of the Bank of England said that we need""a growth of nominal demand sufficient to reverse the extraordinarily steep and simultaneous downturn in output around the world."" That means using monetary policy to boost the economy. As a result of the legal framework that we set out for the Bank of England in 1997, it has a duty to prevent deflation as well as inflation. That is why it has cut interest rates significantly, and that has put hundreds of pounds a month back into the pockets of mortgage holders. With the support of the Government, the bank is now using £75 billion to increase the money supply by buying further assets in the market. That is already having an impact on the markets.