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mpc: 2 expenditure had appeared to slow in Q3 on the basis of July and August data, but employment growth and consumerconfidence had remained robust. A4 In Japan, industrial production had declined sharply in September, but overall quarterly growth in Q3 had been stronger, at 1.6%, than in the previous quarter. The tertiary activity index had risen by 1.1% in August. Strong growth in private machinery orders in August (up 24.3% on a year ago) had pointed to a recovery in private fixed investment in Q3. In the household sector, nominal wages had been 0.9% higher than a year ago in September, but retail sales values had declined by 1.7% over the same period. A5 The Brent crude spot oil price had risen by over $1 per barrel since the previous meeting, to more than $31 per barrel. Options contracts suggested that the probability of the oil price rising further had increased earlier in the month, but had since returned to a level similar to that at the October meeting. Industrial commodity prices had risen on the month. A6 Higher oil prices had contributed to increases in headline CPI measures in both the United States and the euro area. Excluding energy prices and food, the core inflation rate in the United States had fallen to 2.5% in September, whereas the euro-area rate had risen to 1.4%. The headline HICP inflation rate in the euro area had risen to 2.8% in September from 2.3% in August. The German CPI data for October had showed the headline annual rate falling from 2.5% to 2.3%, suggesting that euro-area inflation may have eased in October. However, rising German import prices in September and higher euro-area producer price inflation in August and September had pointed to inflationary pressures in the pipeline. A7 Wage pressures in the United States had stabilised in Q3 with the Employment Cost Index growing by 0.9%. A8 Market expectations of US official interest rates had eased during the month, with a reduction early in 2001 now implied. In the euro area, market expectations had been stronger, with the expected further 25 basis point increase in rates brought forward into 2000. A9 In the emerging market economies, credit conditions had tightened during the month. Bond yield spreads had risen and equity price indices for Latin America and Asia had fallen. Industrial