mpc.theyserveforyou.com

mpc: 7 households was 8.6% in Q3, the highest rate since 1991. These data were broadly corroborative of the real-side evidence of continuing robust consumption growth. 24 The FT All Share Index had risen by about 2½% over the past month, and was at about the same level as in August. House prices continued to rise rapidly, with the twelve month rate on both the Halifax and Nationwide indices above 10%. As already noted, since the August Inflation Report the sterling yield curve had steepened out to medium maturities. 25 The sterling exchange rate index had risen by over half a percentage point since the Committee's October meeting and was about three percentage points above the path assumed in the August fan chart projections. The Committee agreed to incorporate in its published November projections an assumption that sterling would be half way between its current rate and a path related to market interest rate differentials, with the sensitivity of the projections to both shown in the Inflation Report. Some members inclined towards the former, and some preferred the latter.

The world economic outlook

26 The Committee noted the assumptions it had made in its latest projections. The outlook in each of the US, the euro area and Japan was somewhat better, and prospects among the emerging market economies had generally improved. The overall picture was therefore slightly stronger than assumed in the Committee's August projection, although there remained clear downside risks from the possibility of an equity price correction in the USA and persistent current account imbalances. 27 Against this background, Committee members agreed that the outlook for world prices looked less benign than at the time of the August Inflation Report. While there was still spare capacity in parts of the world economy, this was being utilised as a generalised recovery progressed. Imported price inflation had been weak (or negative) over the past few years, but had recently begun to rise.

The November inflation and output growth projections

28 The Committee agreed the projections to be published in the Inflation Report on 10 November. 29 On the assumption of constant official interest rates of 5.5%, the central projection in the published fan chart for activity was for slightly more rapid growth in the short term than in August, levelling off to slightly above trend. The level of activity was higher than projected in August for almost all of the