mpc.theyserveforyou.com

mpc: 10 been replaced by firms investing in more developmental projects, such as Internet sites. Agricultural production had remained weak in all regions. A47 Retail spending had improved further, although growth had been moderate. The pattern of consumer spending had remained similar to previous months, with department store sales weaker than in discount and out-of-town stores. A48 There had been evidence of further tightening in the labour market. Most regions had reportedincreased skill shortages, with particular concern reported in the south and south-east of England. Many contacts had noted that unskilled labour had also become more difficult to recruit, especially for retail positions. Pay pressures had remained subdued, with most settlements lower than a year ago. However, pressures had appeared slightly stronger than in previous months, especially in southern regions. A49 Input prices had picked up further, particularly for oil-related products and some metals, although overall prices remained broadly flat. Many manufacturers had continued to find it difficult to raise prices, and retail prices remained flat or falling. Furthermore, a number of firms thought that consumers had become more sensitive to price differences within each sector, and had begun to bargain over price to an increasing extent. A50 Growth in house prices had remained more pronounced in the southern regions, although there had been evidence that growth here had peaked. The buy-to-let market had slowed. In the northern regions of the United Kingdom, growth in housing activity had continued to increase steadily.

VII Market intelligence

A51 The effective exchange rate index for sterling had been little changed since the October MPC meeting, but sterling had appreciated against the euro from the middle of the month. This strengthening had coincided with the announcement of merger and acquisition activity. It was possible that anticipation of potential sterling purchases had encouraged others to bring forward their purchases of sterling. Such influences on sterling's exchange rate were expected to be temporary.