Mr Major’s Written Parliamentary Answer on the Balance of Trade – 4 May 1989

Below is the text of Mr Major’s written Parliamentary Answer on the Balance of Trade on 4th May 1989.

Mr. Cousins To ask the Chancellor of the Exchequer what is his latest estimate for the balance of trade in manufacturing for the current year.

Mr. Major I refer the hon. Member to the reply I gave to the hon. Member for Middlesbrough (Mr. Bell) on 19 April, at column 168.

Mr. Lewis To ask the Chancellor of the Exchequer what is his latest estimate for the balance of trade deficit in the current year.

Mr. Galloway To ask the Chancellor of the Exchequer what is his latest estimate for the balance of trade deficit in the current year.

Mr. McWilliam To ask the Chancellor of the Exchequer what is his latest estimate for the balance of trade deficit in 1989.

Mr. Major I refer the hon. Members to the reply I gave to the hon. Member for Derbyshire, North-East (Mr. Barnes) on 19 April, at column 168.

Mr. Knox To ask the Chancellor of the Exchequer what effect current interest rates are having on the balance of trade.

Mr. Major The current level of interest rates is designed to slow the growth of domestic demand. The effects of this tighter monetary policy are already apparent in, for example, recent figures for MO, retail sales and the housing market. In time, the current account deficit will also start to narrow.

Mr. Hunter To ask the Chancellor of the Exchequer if he will make a further statement on the United Kingdom’s current trade deficit.

Mr. Major The present trade deficit has primarily reflected the strength of domestic demand, particularly investment. The Government responded appropriately by tightening monetary policy and the effects of this are already apparent – for example, in recent figures for MO, retail sales and the housing market. As the growth of domestic demand slows, so the monthly current account and trade deficits are expected to fall.