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mpc: 4 With the notable exception of the Topix, major equity markets had fallen a little over the month. This was difficult to account for in terms of real interest rates - ten-year spot real rates had fallen in the United Kingdom and the euro area - or prospects for corporate earnings, which, on the basis of surveys of investment analysts, had probably improved. Markets had reacted sharply to the terrorist attack in Madrid, and it seemed possible that equity prices were reflecting perceptions of increased geopolitical risk. That was consistent with the fact that the attack had triggered equity price falls across most industry sectors. Also, option prices suggested that the risk of significant falls in equity market indices was being given more weight than before.