Government Borrowing

Treasury written question – answered on 7th January 2003.

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Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary to the Treasury

To ask the Chancellor of the Exchequer pursuant to his answer of 12 December, Official Report, column 472W on government borrowing, what the evidence is of the effect of government borrowing on wholesale commercial rates.

Photo of Ruth Kelly Ruth Kelly Financial Secretary, HM Treasury

As the right hon. gentleman will note from the Chief Secretary's previous answer of 12 December, there is no clear-cut evidence regarding the impact of government borrowing on commercial borrowing rates. In particular, the statistical evidence in the economic literature from both time series and cross-sectional studies is inconclusive on this question.

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