Below is the text of Mr Major’s written Parliamentary Answer on Interest Rates on 18th January 1988.
Dr. Reid To ask the Chancellor of the Exchequer what is his estimate of the extra borrowing costs to industry incurred by a rise of 1 per cent. in interest rates.
Mr. Major The cost to industrial and commercial companies of a one percentage point rise in United Kingdom short-term interest rates maintained for a full year is estimated to be about £400 million. The estimate is based on their holdings of financial assets and liabilities at the end of the second quarter of 1988, the latest period for which comprehensive data are available.