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ANNEX: SUMMARY OF DATA PRESENTED BY BANK STAFF

A1 This Annex summarises the analysis presented by Bank staff to the Monetary Policy Committee on 3 November in advance of its meeting on 8-9 November 2000. At the start of the Committee meeting itself, members were made aware of information that had subsequently become available, and that information is included in this Annex.

I

The international environment

A2 Based on the advance estimate, US GDP in Q3 had risen by0.7% compared with the previous quarter, with quarterly consumption growth picking up to 1.1%. Investment growth had slowed, and the level ofgovernment spending had fallen, following strong growth in both components in Q2. Investment growth in information technology (IT) equipment had slowed, but investment in residential and non-IT equipment had also contributed to the slower overall rate. Consumer confidence had fallen sharply in October, possibly reflecting the pattern of US equity prices (volatility in equity prices had increased - particularly in the technology-based NASDAQ index - andthe Wilshire 5000 index, a broad measure of equity prices, had been around 6% lower on average in October compared with the previous month). However, new home sales had risen sharply in September, and mortgage rates had fallen, improving the outlook for the housing market. There had been evidence that credit conditions for corporate borrowers had tightened, both for bank lending and in the bond market. Productivity had risen in Q3 by0.9% compared with the previous quarter, a lower growth rate than in Q2, but the annual rate had remained at historically high levels. Employment growth had eased further in October, but the unemployment rate had remained at 3.9%. A3 In the euro area, quarterly GDP growth in Q2 had been revised down from 0.9% to 0.8%. Industrial production had slowed in July and August, although business confidence remained high. In contrast, slowing retail sales had been coupled with a fall in consumer confidence in September; consumer confidence had been unchanged in October. The unemployment rate in the euro area had fallen from 9.1% to 9.0% in September. In Germany, the IFO index had fallen to 98.0 in September from 98.9 in August. Manufacturing orders in Germany had been 4.5% lower in September, following a 2.1% rise in August. The growth in orders had been consistently above industrial production for more than a year, suggesting that industrial production might slow only moderately. In France, household