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mpc: 9 risen from 3.0% to 3.3% in September. RPIY inflation had risen to 2.0% in September, up from 1.5% in the previous month, while HICP inflation had increased from 0.6% to 1.0% over the same period.

VI

Reports by the Bank's Agents

A40 The Agents reported that manufacturing output growth had recently picked up further. The pick- up had been mostly accounted for by continued improvements in export demand, but domestic orders had also strengthened more recently in some regions. However, many contacts (particularly in traditional manufacturing sectors) had remained concerned about margin pressure as a result of overseas competition, particularly from continental Europe. Reflecting these concerns, investment intentions in the sector had continued to deteriorate in most regions ­ there had been increased reports of project deferrals. A41 Service sector growth had recently eased slightly overall, as consumer services activity continued to slow. Although some Agents had noted a recovery in tourism-related activity late in the summer, this had been more than offset by the negative impact of the petrol disruption in mid- September ­ business that was unlikely to be recouped. Most areas of business services had continued to record strong growth. A42 There had been evidence of a further slowing in residential construction growth (mostly in the southern regions) in recent months. Offsetting this, growth in commercial and public construction appeared to have strengthened. A43 The Agents suggested that there had been little change in underlying retail sales growth recently. Despite announcements of price cuts by several manufacturers in recent months, there had been little pick-up in new car sales, even during the new registration period. A44 Input price inflation had picked up further recently according to the Agents. Contacts continued to cite industrial gas and oil-related products as recording the most significant price increases. In particular, many firms had noticed the impact of these increases through fuel surcharges on transport and distribution costs. There had also been early reports of higher import prices from dollar- denominated markets as a result of the depreciation of the sterling. These cost increases had remained