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ANNEX: SUMMARY OF DATA PRESENTED BY BANK STAFF

A1 This annex summarises the analysis presented by Bank staff to the Monetary Policy Committee on 31 March, in advance of the meeting on 5-6 April 2000. At the start of the Committee meeting itself, members were made aware of information that had subsequently become available, and that information is included in this Annex.

I The international environment

A2 Overall, the world economy had continued to strengthen and industrial production for a wide range of countries had remained strong in January, though there were signs of a slowing in annual growth. Producer and consumer price inflation had risen a little since the end of the year in the United States and the euro area, largely reflecting increased energy costs. OPEC's decision to increase oil production had eased the pressures on oil prices since March, as had evidence of lower compliance with output quotas in the latest quarter. Interest rates had been raised in the United States and the euro area in March, and rates implied by futures contracts had pointed to further tightening in 2000. A3 Final estimates for US GDP had shown 4.2% growth for 1999 as a whole. US GDP growth had been revised up by 0.1 percentage point in Q4 to 1.8% for the quarter. The revisions had mainly affected net trade, with higher exports and lower imports than in the preliminary profile. However, in January, US export volumes had fallen by 3.4% over the month, partly due to a fall in aircraft sales, and the US trade deficit had widened to a record $28 billion. US industrial production had slowed slightly in February to 5.6% on a year earlier, largely because of a fall in automobile production. Retail sales, which had grown by 1.1% in February, pointed to strong underlying growth of consumption in Q1, though consumer confidence indicators in March had fallen further from January's record levels. Producer price inflation had been strong in February, rising to 4% over the year, mainly reflecting energy and tobacco price increases. Headline consumer price inflation (CPI) had also risen, to 3.2% in the year to February, and core CPI inflation had risen to 2.1%. A4 The picture of stronger activity in the euro area in the second half of the year had been confirmed by Q4 results. GDP had grown by 0.9% in Q4 and by 2.2% in 1999. Net trade had made a negative contribution to growth in Q4, but domestic demand had been strong, reflecting the growth