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mpc: 25 There had continued to be little evidence of any pickup in wage pressures. While the annual growth rate of the headline average earnings index had increased in February, this seemed to have been largely related to a shift in the pattern of bonus payments. Consistent with this, whole-economy earnings growth had fallen back to 4.5% in March. Preliminary indications from wage agreements struck in the three months to April suggested that pay settlements had edged down relative to a year earlier. Given that around a quarter of all private sector wage agreements typically occur in April, this was further evidence that second round effects arising from higher energy prices had been limited. It was possible that the credibility of the inflation target, together with the effects of strong competition in product markets, had led firms to believe that they would not be able to pass higher energy prices through to their output prices. Firms might, therefore, have been putting downward pressure on wages to offset higher energy-related input costs.