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OPINION

Next week's economics: 30 March - 3 April

Next week's economics: 30 March - 3 April
March 26, 2015
Next week's economics: 30 March - 3 April

In the euro area, purchasing managers could report that growth in manufacturing is at an eight-month high, while official figures might show that the unemployment rate has fallen to 11.1 per cent - a full percentage point below its 2013 peak. In the US, the ISM survey should also report decent manufacturing growth - albeit perhaps a little weaker than in the winter - while official figures on Friday show a rise of almost 300,000 in non-farm payrolls and a fall in the unemployment rate to 5.4 per cent. In both regions, however, employment growth is flattered by slower productivity growth.

The UK should be sharing in this upturn: purchasing managers could report a rise in manufacturing growth. However, Bank of England figures on borrowing might suggest that the recovery is unbalanced. They are likely to show that consumer credit is growing strongly - almost 7 per cent year on year - while lending to non-financial companies is still falling. That's consistent with a recovery drive by consumer debt rather than capital spending.

However, final GDP figures on Tuesday might give us a cheerier picture here. They will tell us about financial balances. These could show that the corporate sector's big surplus - that is, an excess of retained profits over capital spending - fell last year, although it might have increased in the fourth quarter. This could be very good news, to the extent that it suggests that companies' longstanding reluctance to invest is fading away.

Something else is also fading - house price inflation. Figures from the Nationwide Building Society could show that this has fallen to around 5.5 per cent, its slowest rate since September 2013. However, Bank of England data could show that mortgage approvals are now edging up, which might be a sign that this slowdown in inflation is only temporary.

Perhaps the most striking figure next week, though, could be Tuesday's numbers showing that the UK's external current account deficit reached a peacetime record high last year. This is not an immediate concern - if it were, sterling would be weak and gilt yields would be high - perhaps because our deficit is the counterpart of a global savings glut. However, it might become a problem in coming years.