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ANNEX: SUMMARY OF DATA PRESENTED BY BANK STAFF

A1 This Annex summarises the analysis presented by the Bank staff to the Monetary Policy Committee on 3 March, in advance of its meeting on 8 ­ 9 March 2000. At the start of theCommittee meeting itself, members were made aware of information that had subsequentlybecome available, and that information is included in this Annex.

I

The international environment

A2 The global economy (except Japan) had remained strong. The Purchasing Managers Indices for the United States, France and particularly Germany had all risen in February. Bankestimates had suggested that quarterly growth in UK export markets for goods and services hadbeen 3.6% in Q3, and 2.4% in Q4. Oil prices had remained strong in February, with evidence ofgreater backwardation (spot price above futures price). There had been increased volatility in oilprices, reflecting falling oil stocks and speculation about OPEC's strategy. Metal prices had risenin January. Markets were expecting further tightening in monetary policy in the United Statesand the euro area. Market expectations derived from Fed Funds futures had implied a 27 basispoints rise in March and a further 15 basis points in May. Three month euribor futures hadimplied a rate of 4.1% from June. A3 Quarterly US GDP growth for 1999 Q4 had been revised up to 1.7%, from 1.4%. Quarterly labour productivity growth in Q4 had been revised up to 1.5%, the highest rate since1992 Q4. Industrial production and capacity utilisation had both strengthened in January. Thevalue of retail sales had increased by 0.3% in January, following an upwardly revised increase of1.7% in December. The drop in retail sales growth in January might have reflected a millenniumeffect. The monthly growth rates of broad and narrow money had fallen back in January, whichappeared to confirm Y2K effects. Consumer confidence had fallen in February from its highestever level in January, probably reflecting rising oil prices and monetary tightening. There hadbeen little evidence of a secondary effect from rising oil prices on price inflation for other goods.The annual increase in the Personal Consumption Expenditure deflator had remained flat inJanuary at 2%. A4 Preliminary estimates had suggested that GDP had grown in 1999 Q4 by 0.9% and 0.7% in France and Germany respectively. Euro-area industrial production had risen in December.Industrial production in Germany had increased by 0.5% on the month in January. Totalmanufacturing orders in Germany had fallen by -0.4% in January. There had been a small fall ineuro-area employment in 1999 Q3. That was partly explained by the negative effect on German