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mpc: 6 sheets and savings returned to a more normal level in relation to income and wealth. This would be necessary if government expenditure was to increase in line with the plans outlined in the March Budget and the Chancellor's subsequent Spending Review, without putting undue pressure on the supply capacity of the economy. So the evolution of the balance between private sector demand and government spending was a key issue for the inflationary outlook. 16 The news over the month suggested that the domestic demand picture remained broadly in line with this projection. The National Accounts data for the second quarter confirmed earlier estimates of quarterly GDP growth at 0.9%, though the level of GDP in 1999 had been revised up by 0.1 percentage point. Government spending in the second quarter was rather stronger than previously estimated, but fiscal outturns were so far in line with the Government's budget projections. The net trade position was a little weaker. None of this represented a significant change to the overall picture. 17 More recent indicators were mixed. Equity prices in the UK had fallen by 5% on the month and there had been sharp falls in consumer confidence - probably associated with the disruption to petrol supplies. The MORI survey showed that consumer confidence had fallen by 10 points between August and September, which was consistent with the tick down shown by the most recent GfK survey. Retail sales volumes had grown 0.6% in August, somewhat faster than had been expected, but house prices had now been broadly flat for six months. Provisional results from the Royal Institution of Chartered Surveyors' survey of estate agents in September indicated that there would be no change in the balance reporting house price increases over the previous three months, though the balance for London had recovered sharply. 18 The survey evidence on activity was generally weaker: the CBI Distributive Trades survey showed further weakness in motor traders' reported sales in September (though wholesalers' sales were the highest since February 1998); surveys from the Chartered Institute of Purchasing and Supply showed weaker output growth in manufacturing and in services, but stronger in construction; and the CBI/PricewaterhouseCoopers survey of financial services suggested that activity in that sector was growing at its slowest rate since December 1997.