§ Mr. Austin Mitchell
asked the Chancellor of the Exchequer what was the increase in sterling M3 in the seven months to September at an annual rate; and when he expects the rate of inflation to increase to this rate.
§ Mr. Lawson
23.4 per cent. This figure was inflated by distortions caused by the ending of the supplementary special deposits scheme in June. Underlying monetary growth over this period, which was probably around 19 per cent. at an annual rate, has been high due to a number of factors, including the uneven profile of the PSBR. But we confidently expect it to slow down over the remainder of 113W the financial year, in which case there is unlikely to be any significant impact on inflation. Our latest forecast is for an annual inflation rate of 11 per cent. in the year to the fourth quarter of 1981.