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mpc: 2 and Italy and there had been high contributions from stockbuilding in Germany for the second quarter in a row, suggesting that future demand might be met at least partially from stocks. The unemployment rate for the euro area had declined to 8.9% in October. A5 In Japan, GDP had risen by 0.2% in Q3, and GDP growth in Q2 had been revised from 1% to 0.2%. Private capital expenditure, which for the first time included computer software, had risen by 7.8%. Although investment indicators had weakened in October, machinery orders had been strong, due to orders for high-technology machinery. Consumption had increased by only 0.1% during the quarter, reflecting a fall in household expenditure in Q3. A6 The spot price for Brent crude oil had fallen by about $3 since the previous meeting to around $28 per barrel, and futures prices had fallen slightly. There had been a moderate increase in other commodity prices. A7 In the United States, the headline measure of producer price inflation had increased to 3.6% in October, but the core measure had been 1.0%. In the euro area, producer price inflation had reached 6.0% in September with signs of a pick-up in non-energy components. Consumer price inflation in the United States had remained at 3.5% in October, but the core measure had fallen to 2.5%. In contrast, in the euro area, while headline inflation had eased to 2.7% in October, core inflation had risen to 1.5%. Preliminary data for Germany had shown an increase in headline inflation in November, making a fall in the headline measure for the euro area in that month unlikely. A8 Market expectations of official interest rates in the United States and the euro area had eased over the past month. Expectations were now for a larger reduction of rates in the United States. In the euro area, expectations were now for no change in official rates over the next year. A9 In the emerging market economies, industrial production growth had slowed and there had been indications of specific risks from the economies of Argentina and Turkey.

II

Monetary and financial conditions

A10 Both the twelve-month and three-month growth rates of notes and coin had remained strong in November. The provisional twelve-month rate had fallen to 7.2% in November from 8.0% in