The Government do not have a target exchange rate for sterling. By pursuing policies for sound public finances, sustained growth and low inflation, the Government are creating the environment for achieving and maintaining a stable and competitive exchange rate over the medium term. The imperative now is to lock that in for the long term, and to build on it to deliver full employment for Britain in the new millennium. I recognise that there are real concerns, particularly for manufacturers selling their goods in Europe, but short-term fixes are not the answer. The pick-up in world growth is improving UK export performance.
Services exports remain close to record high levels, and manufacturing output is up.
In reality, the news on exports is encouraging. The European Union, as a trading bloc, has a massive balance of payments surplus, inflation is barely 1 per cent. and unemployment is at 10 per cent. However, there is no quick fix here. Exporters are performing well, and CBI data on export orders show clear improvements on a year ago. We will not repeat the mistakes of the past with short-term fixes, which would take us back to Tory boom and bust.