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mpc: 2 2.9%. The extent to which this was a temporary effect, reflecting a reaction to the disruption of petrol supplies in the first half of September, was unclear. Other surveys of inflation expectations suggested little change. But it would be worrying, particularly in the context of the apparent tightness in the labour market, if this increase in inflation expectations were to persist as it could then affect wage bargaining in the coming settlement round.

The world economy

5 Oil prices had fallen $3 since the Committee's previous meeting, with the Brent one month future now just above $30 per barrel. Oil price futures were indicating a fall in prices to about $25 per barrel by the end of 2002, substantially above the projection in the August Inflation Report. It was unclear whether the factors determining the long-run level of the oil price had changed significantly, but the futures curve did at least suggest that the market's view of the horizon over which the price would return to more normal levels had lengthened in recent months. 6 Against this background, the Committee first reviewed the evidence on the likely source of the shock which had resulted in the sharp increase in the price of oil since the end of 1998. Most members felt that the initial shock could largely be attributed to the unexpectedly strong growth of the world economy, in particular the rapid recovery of the Asian economies from the difficulties they had experienced in the second half of 1998. This had subsequently been reinforced by OPEC restraint on supply. Other commodity prices had been slower to respond, but were now beginning to do so. The OPEC countries had recently shown themselves willing to increase their supply of oil, which - together with the release of oil from the US strategic stockpile - had helped to stabilise the market but at a relatively high nominal price level. 7 Looking forward, the price path implied by the futures curve would reflect the market consensus on the outlook for demand, for non-OPEC supply and for the ability of the OPEC countries to sustain the cohesion which would be required to stabilise prices at around their chosen target range. It continued to represent a plausible central case. But it was recognised by the Committee that there were risks around this path. In particular, there was felt by some members to be an upside risk in the coming months as the Northern Hemisphere winter