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mpc: 4 increased. There had been almost complete pass-through of the January repo rate increase to standard variable mortgage rates by the beginning of February. A13 There had been little change in RPIX inflation expectations derived from surveys for 2000. Most survey-based measures had fallen by 0.1 percentage points to between 2.1% and 2.3%. Survey estimates of RPIX inflation for 2001 had suggested that people expected inflation to rise to 2.4%. A14 Equity prices had fallen by 3.6% since the January MPC meeting, well below the performance of other stock markets. Equity prices in all sectors other than information technology and non-cyclical services had fallen since the January MPC meeting. A15 Sterling had been volatile at the end of January and beginning of February. By the close of business on 9 February the effective exchange rate index had appreciated by 0.7% from its level at the January MPC meeting to 108.6. Over the month sterling had depreciated markedly against the dollar (2.2%) but had appreciated by 1.5% against the euro.

III

Demand and output

A16 The preliminary ONS estimate of GDP growth in 1999 Q4 had been 0.8%, unchanged from Q3. The annual growth rate had risen to 2.7%. Service sector output had grown by 0.9% in Q4 and had been 2.9% up on a year earlier. Within services, the distribution, hotels and catering sector had grown by 0.6%. The more recently available industrial production data had shown a rise of 0.3% in Q4 while manufacturing output had risen by 0.7% over the same period. A17 New construction orders had risen by 0.6% in the three months to December. The CIPS index of construction activity had indicated robust growth since February 1999. A18 The deficit on trade in goods had widened slightly, to £2.5 billion in November from £2.3 billion in October. The EU deficit had widened to £0.5 billion but the non-EU goods deficit had narrowed slightly to £2.0 billion. The non-EU goods deficit had widened to £2.3 billion in December. Excluding oil and erratics, the volume of goods exports had risen by 1.2% in the three months to November and the volume of imports had risen by 2.4%. Total goods imports had risen by 0.7% over the same period. A19 Retail sales volumes had risen by 0.6% in December and by 1.3% on a three-monthly basis. Consumer confidence remained strong. The GfK consumer confidence index had risen to +8.0 in