Financial Markets

May I remind the Chancellor, since to him it might seem a long time ago, that last Monday I urged him to cut interest rates as a supplementary measure to dealing with the problem of the under-capitalisation of our banks? He clearly agreed with me, because last Wednesday it happened. I put it to him that although all the measures that he has taken so far will obviously lead to serious inflation in the long run, in the short run the problem that we face is likely to be deflation. Will he therefore not just rest on his laurels with regard to interest rates? In 1931—when, by an unhappy coincidence, there was also a Labour Chancellor in charge, Philip Snowden—the decision was taken to reduce interest rates to 2 per cent., where they remained for nearly a decade and contributed in a major way to the recovery of our economy after that. Will the Chancellor go for really severe cuts in interest rates straight away?