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mpc: 5 A18 UK equity market indices had fallen by between 5% and 6½% since the September MPC meeting, broadly in line with international markets. Profit warnings issued by UK firms in Q3 had been close to 1999 levels; earlier in the year, they had been substantially lower than twelve months before. A19 Since the previous MPC meeting, the sterling exchange rate index (ERI) had increased by 1.2% to 108.0. Sterling had appreciated against all major currencies; changes in interest rate differentials could have contributed to these movements. The risk premium on sterling, calculated using Consensus Economics' measure of expected nominal rates, had risen against the dollar, fallen against the euro and had remained little changed for the ERI.

III

Demand and output

A20 In the National Accounts, quarterly GDP growth had been unrevised at 0.9% in Q2. The level of GDP had been revised up slightly by 0.1%, with annual growth correspondingly revised up from 3.1% to 3.2%. Revisions had brought the output-based measure of Q2 growth into line with the expenditure and income-based measures. Quarterly final domestic demand growth had been unrevised at 0.9% in Q2. The contribution of stockbuilding had been revised up slightly, to 0.1 percentage points in Q2, compared with zero in the previous GDP release. A21 Quarterly household consumption growth had been unrevised at 0.8% in Q2. Within that, non-durable goods consumption had grown by 1.1%. Durables consumption had fallen by 0.1% in Q2, partly depressed by continued weak vehicle expenditure, which had fallen by 1.1% in Q2. Spending on services had increased by 0.7% in Q2, compared with 0.3% in Q1. A22 Government consumption growth in Q2 had been revised up to 2.1% from 1.9%. Whole- economy investment growth in Q2 had been revised up from 0.2% to 0.4%. Excluding net acquisition of valuables, total investment growth had been revised up from 0.2% to 0.9%. Business, general government and dwellings investment had all risen on the quarter. Business