Economy: Alan Walters diary (Interest rates) [Mark Thatcher’s disappearance; Governor committed to reducing interest rates][released 2012]

Wednesday 13th January 1982

Day overshadowed by Mark’s [Mark Thatcher] disappearance.

Gvr’s [Governor of the Bank of England] interview -1½ hours - said he was committed to bringing interest rates down - but he could not get enough paper (bills) to buy - no one offers at less than 142⁄3 yet he is feeding in £500 m a day.

JH [John Hoskyns] reports very worried reaction by Howell and Cecil to language in Westwell draft

PM hooked on $2.00 pound, Treasury on M3 etc.

Lunch with Peter Townsend and Chris FOSTER of ESSO - they want right to export in gas bill.

PM cancelled meeting but saw me + talked about Chevening meeting - “boring” - cosy in group - no ideas - Barney Heyhoe there so Jim Prior will find out all. Said John Nott thought £11 PSBR was right - PM adamant that £9 max/ I talked about indexed debt reduce interest rate element (£14 Bn now).

HKS bid - dreadful report - jobs for the boys - she agreed but could not overturn - best policy no more referrals to MMC - distance gvt from the decision.

Talked about [sic]