Monday 20th September 1982
Sent Peter Middleton a note from John Vereker on need for 3% norm rather than 4% wanted by Leon Brittan
Spoke to Peter Middleton about need to help wages “norm” at 3 not 4% in view of inflation rapidly coming down.
Lunch Milton Friedman - he argued US inflation will stay at 8% and interest rates will not fall - usual criticisms of yo-yo effect of M in UK as in USA
Memo to PM for tomorrow’s box on US inflation rate - told her that it is basically on course for 3-5% inflation in 1984. One problem with velocity which in winter of 1982/2 declined 3 % instead of growing 3% (Used Herb Stein’s statistics [Sic]