asked the Chancellor of the Exchequer what estimate he has made of the level of domestic credit expansion for the financial year 1970–71.

As I said in my Budget speech, my intention is that domestic credit expansion should be within a figure of £900 million in 1970–71.

Can my right hon. Friend say what the current estimate is of the velocity of circulation of money, because that is intricately bound up with this matter? Since the theory rests on the steady rate of velocity of circulation, what investigations are being carried out in this direction?

I have no forecast to make about what is happening to the velocity of circulation. It is the case, as I indicated, that whereas in 1969–70 money supply grew more rapidly than d.c.e., as indeed d.c.e. was negative, I think that in 1970–71 it will grow somewhat less rapidly, although there will be a substantial growth in money supply during this financial year.

What factors operated to falsify the forecast of d.c.e. growth in the Letter of Intent to the I.M.F. last year? Will the same factors operate this year?

The figures were not falsified. The figure in the Letter of Intent was a ceiling. To be under a ceiling is not to be falsified, any more than to be over a balance of payments target is to be falsified.