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mpc: 8 A34 According to the Bank's settlements database, the twelve-month AEI-weighted mean settlement had been unchanged at 3.3% in March. The difference between average regular pay growth and settlements had been around 1 percentage point. This had been well within the normal range of drift over the past five years.

V

Prices

A35 The level of sterling oil prices at the end of April had been broadly unchanged from the level at the start of the month, at around £18 per barrel. However, average oil prices in April had been around 6% higher than their average in March, reflecting increases during March, and had been broadly unchanged from a year earlier. Manufacturing input prices had risen by 2.6% in March, mainly reflecting increases in the prices of crude petroleum products. Together with base effects, this had raised their annual inflation rate to ­2.5% in March from ­7.1% in February. The CIPS manufacturing survey had suggested that, going forward, input prices would rise further. The input price balance had risen to 51.1 in April, from 43.3 in March, above the no-change level of 50 for the first time in a year. A36 Manufacturing output prices excluding duties (PPIY) had been unchanged in March, while the annual inflation rate had fallen by 0.3 percentage points to 0.0%. Survey data had suggested that output price inflation would remain subdued. The CBI Quarterly Industrial Trends survey balance of expected output prices had risen to ­10 in April, from ­16 in March. A37 Annual RPIX inflation had risen by 0.1 percentage points to 2.3% in March. The rise had mainly reflected slightly higher annual services price inflation, which had risen to 4.6% from 4.5% in February. Annual goods price inflation had been unchanged at 0.1% in March. Annual inflation on the RPIY measure had fallen by 0.2 percentage points to 2.5% in March, but the RPI measure of inflation had risen to 1.3% in March, from 1.0% in February. On the HICP measure, annual inflation had remained at 1.5% in March. In 2002 Q1 as a whole, RPIX inflation had been 2.4%.

VI

Reports by the Bank's Agents

A38 The Bank's regional Agents had reported that manufacturing confidence had continued to improve, with many contacts believing that 2001 Q4 had been the bottom of the cycle. Confidence had been supported by improving orders in both domestic and export markets. The upturn in the US economy had been seen as the main driver of growth in exports, but nervousness had remained about