The authors argue that, in spite of the instinct of the Prime Minister, the authorities never attempted to control the supply of money in the 1980s and only paid lip service to controlling the demand for money. Extraordinary behaviour of bank lending was a significant cause of the Barber boom in the mid-1970s, of the Lawson boom of the 1980s and of the depth of the recession in the early 1990s. They assert that varying interest rates is an ineffective tool to manage lending and controversially propose that the only enduring solution is to control the banks' reserves. The authors forcefully argue that should the UK not become a member of the European Single Currency the debate surrounding monetary base control will need to be reopened.

By reassessing a significant era in British economic policy and suggesting a strategy for the future, this book will be of great interest to economic historians, monetary and political economists, policymakers and investment advisers.