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mpc: 3 A9 The path of interest rates implied by futures contracts had moderated for the euro area, and in the case of the United States had converged to the current level of the Federal funds target rate. The euro-area current account was in deficit so far this year, and consistent with this the scale of combined net direct and portfolio capital outflows had fallen over the course of this year.

II

Monetary and financial conditions

A10 The twelve-month growth rate of notes and coin had risen strongly, from 6.9% in August to 8.7% in September. Around 0.5 percentage points of this pick-up could be attributed to the petrol supply disruption, which had led banks to build up precautionary cash holdings. A11 M4 and M4 lending had both been stronger. August M4 had increased by £18.2 billion and the twelve-month growth rate of M4 had risen to 8.8%. Some of the strength of M4 had been due to other financial corporations' (OFCs) deposits. Three special factors had appeared to increase OFCs' M4: a large 3G licence-related transaction; financing transactions related to Lloyds TSB's takeover of Scottish Widows; and swings in the repo position of the OFC sector. Excluding OFCs, twelve-month M4 growth had been 7.5%. M4 lending excluding securitisations had remained strong in August and had increased by £19.4 billion. The twelve-month growth rate of M4 lending had risen to 13%. M4 lending excluding OFCs had increased by 11.5%, though OFCs had accounted for almost all of the pick-up in the growth of M4 on the month. A12 Households' M4 had risen by £4.4 billion, raising the twelve-month growth rate to 5.6%. Households' M4 lending excluding securitisations had been £4.1 billion; the twelve-month growth rate had fallen to 10%. Within total lending to individuals, net secured lending had recovered to more than £3.5 billion, and unsecured lending had fallen sharply to around £0.6 billion. A13 Compared with the windfalls in 1997, the Scottish Widows windfall had been relatively small, but with a much higher proportion in cash. It was not possible, however, to quantify precisely the impact on the monetary data, and in particular the extent to which households' M4