mpc.theyserveforyou.com

mpc: 9 and insurance prices. Annual services price inflation had fallen from 3.4% to 3.1% in October, the lowest annual rate since March 1998. RPI inflation had fallen from 3.3% to 3.1% in October. RPIY inflation had fallen to 1.6% in October, while HICP inflation had been unchanged at 1.0%. The difference between RPIX and HICP inflation had narrowed to 1.0%.

VI

Reports by the Bank's Agents

A39 The Bank's regional Agents reported that overall construction growth had remained broadly stable recently, although while commercial construction activity had continued at a high level, the pace of growth had probably now peaked. Offsetting this, public construction activity was expected to strengthen during 2001, but the timing was uncertain. Housing construction, which had slowed in recent months, had probably now stabilised at a lower level. A40 Manufacturing output growth had picked up slightly further recently. The recovery had continued to be mostly driven by improvements in export demand. Agents' contacts had mentioned increased efforts to obtain expanded market share in `dollar markets', such as the United States and the Middle East. While export volumes to the euro area had continued to grow, most firms had suggested that this had been at the expense of margins. On the whole, it was suggested that growth in imports continued to exceed that of exports. A41 Reflecting continued concerns over profitability in many traditional manufacturing industries, investment intentions in the sector remained depressed in most regions, although some firms had invested heavily in research and development. Investment intentions in the services sector had remained strong and stable. But some contacts had noted caution about future investment plans due to concerns about overcapacity in some areas (eg, leisure). A42 The Agents had suggested that there had been little cha nge in underlying retail sales growth recently. However, the picture had become more difficult to read in recent months, due to the impact of the fuel dispute, flooding and rail disruptions. But, on the whole, most retailers had suggested that there had been little easing in consumer confidence recently. There had been some signs that, following a sustained period of year-on-year declines, sales of new vehicles had now stabilised. But there had been some caution regarding the extent of pent-up demand in this market.