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mpc: 3 increased by 3.3% in Q3, in line with its increases over the year. Credit card lending had continued to grow in excess of 20% per annum. A12 Private non-financial corporations' (PNFCs) deposits had remained broadly flat in Q3, though deposits had risen by £1.4 billion (1.2%) in September. The twelve-month growth rate had fallen from 7.4% in Q2 to 4.9% in Q3. PNFCs' M4 lending had picked up in Q3. Lending had been particularly strong in September, increasing by £1.8 billion (0.9%). But the annual growth rate had fallen from 4.7% in Q2 to 4.2% in Q3, compared with an average annual rate of 5.8% in 1998. A broader measure of PNFCs' borrowing (that also included all bond and equity issues as well as non-sterling lending by banks) had been weaker in Q3 than in Q2: the average monthly flow had increased by £3.3 billion compared with £5.9 billion in Q2. A13 Other financial corporations' (OFCs') M4 deposits had fallen sharply in Q3, and the annual growth rate had continued the downward trend since 1998 Q1. The average monthly flow had been -£2.7 billion in Q3, compared with -£1.3 billion in Q2. The monthly flow in September had been particularly weak (-£7.0 billion). OFCs' M4 lending had increased slightly in Q3, but the flow in September had been -£2.1 billion. A14 Short-term interest rate expectations implied by short sterling futures contracts had fallen since the previous MPC meeting. The falls had been between 20 and 30 basis points in the September 2002-March 2003 contracts (less at shorter maturities). Nominal forward rates at broadly comparable maturities had also decreased (by 40-50 basis points after 3 to 3.5 years). A15 Short sterling futures and nominal forward rates derived from the gilts market had pointed to different profiles for the expected level of interest rates. In particular, short sterling futures had pointed to a peak of 7.3% in interbank rates in December 2001, around 100 basis points greater than the peak of 6.3% for gilt yields in the forward curve in the second half of 2001. The three-month LIBOR/general collateral interest rate spread had picked up sharply at the beginning of October as the date for year-end LIBOR delivery had passed. But spreads further out along the curve had not looked unusual given recent experience. A16 There had also been falls in nominal yields at the long end of the forward curve during October. This had been mirrored in falls in long corporate bond yields. Since the beginning of the year, the yield