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Opinion

Next week's economics: May 9 - 13

Next week's economics: May 9 - 13
May 5, 2016
Next week's economics: May 9 - 13

On Wednesday, NIESR might estimate that GDP grew by just 0.3 per cent in the three months to April - only half the rate it grew by in Q4 2015. Industry is doing worse than this. If official figures on Wednesday are consistent with the ONS's initial GDP estimate last week, they'll show that industrial production and manufacturing output fell by 0.4 per cent in the first quarter - although March should see a rise.

It's not just manufacturing that's in the doldrums, though. On Tuesday, the British Retail Consortium could report that retail sales growth was weak in April, following a flat March. This might in part be for temporary reasons: the early Easter and poor weather in April hurt sales. But it might also be a sign that slower real wage growth is starting to hit spending.

Granted, there will be signs of vibrancy elsewhere. Lloyds Bank and the RICS might both report that house prices are still rising sharply - albeit not quite as much so as in recent months - as a lack of supply offsets cooling demand from buy-to-letters. This, however, might be a symptom of disease rather than ill health. Sharply rising house prices divert resources towards a low productivity growth sector - construction - and leave renters less cash to spend in more dynamic sectors. On both counts, aggregate productivity growth falls.

Elsewhere, however, things might be better. Official figures on Thursday should show that industrial production in the eurozone recovered in March after February's dip, with growth in most major nations. This could mean that output rose by a hefty 1 per cent in the first quarter. And in the US, Friday's numbers could show that retail sales rose in April. This would fuel hopes that Q1's weak growth - GDP rose a mere 0.5 per cent at an annualised rate - was only temporary.

On Thursday, the MPC is expected to say that it voted unanimously to leave rates unchanged. The accompanying Inflation Report will explain why. It might downgrade both the growth and inflation outlooks.