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mpc: 2 4 Consumer confidence, as measured by the GfK survey, had fallen in November but remainedabove its long-run average. The MORI survey had risen, but this series was usually more volatilethan the GfK measure. While the recent fall in the GfK survey might reflect monthly volatility, therises in interest rates since the beginning of September might have had some dampening effect onconfidence. The disaggregated responses to the individual questions in the survey showed thatrespondents thought that the general level of unemployment would rise. This seemed at odds withthe recent evidence that employment had continued to grow. It was possible that, althoughemployment remained high, the pace of job creation and job destruction was higher now than in thepast and that this had heightened individuals' feelings about their job insecurity in an existing job. Ifso, that uncertainty could in turn have a dampening effect on consumption growth. But lookingbeyond the latest movements in consumer confidence and retail sales, the fundamental determinantsof consumption such as housing and financial wealth and real incomes seemed to be strengthening. 5 Turning to net trade, both exports and imports had turned out a little stronger than expected at thetime of the November Inflation Report. The UK share of world export markets probably increased inQ3, but was much lower than it had been prior to the appreciation of sterling from August 1996. Theexport orders index in the latest CIPS survey had remained above 50 for the seventh successivemonth, while the CBI monthly trends survey balance for export orders was negative, but less so thana year ago. There were, however, some signs that export optimism had deteriorated in recentmonths, for example in the DHL survey. 6 There had also been slightly stronger-than-expected import growth in Q3, so that the contributionof net trade to GDP growth in Q3 was only slightly more positive than had been expected. Stronggrowth in imports could be linked to re-exporting, and it seemed stronger than was consistent withrecently observed domestic demand growth. 7 Looking forward, the central projection for activity in the published fan chart assumed that nettrade would make negative contributions to GDP growth in the forecast period. The net tradecontributions in the central projection were somewhat more negative than projected by the average ofother forecasters, and that largely reflected a steeper assumed sterling depreciation by otherforecasters. The sterling effective exchange rate had strengthened since the November Report andother things being equal that would tend to depress net exports relative to the projection made then. 8 The latest data for non-EU trade in October showed a marked fall in exports but September hadbeen strong. That evidence seemed broadly consistent with the projections so far. The Agents'special survey tried to shed light on the recent export puzzle. The picture that emerged was of veryconsiderable price and market pressures. This was particularly marked for exports to the EU, which