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OPINION

Next week's economics: 23-27 May

Next week's economics: 23-27 May
May 19, 2016
Next week's economics: 23-27 May

We'll see plenty of reasons for the latter in other numbers next week. Quite simply, overseas demand is growing only sluggishly.

In the US, although the second estimate of GDP might show slightly higher growth than the 0.5 per cent originally estimated, it will still be weak - probably less than 1 per cent at an annualised rate. And there might be little sign of any swift upturn. Tuesday's figures might show only small rises in durable goods orders and sales of new houses; weakness in the latter might be significant as it could be evidence that households are pessimistic about their future incomes.

In the euro area, flash purchasing managers' surveys are likely to show weak growth. This would be consistent with Germany's Ifo survey, which is likely to show that manufacturers' business conditions are worse than they were in the autumn.

That said, there might be glimmers of hope. The National Bank of Belgium's business climate indicator and Germany's ZEW survey of financial professionals' optimism might both post third successive monthly rises.

Weak growth in the US and eurozone is worrying for the UK not just because these are major trading partners, but also because weak growth there is due in part to sluggish growth in world trade generally. This matters to investors because there has for years been a close correlation between world trade growth and equity returns.

So far, UK growth has held up well in the face of this global malaise because of the strength of consumer spending. But this might be faltering. GfK might report on Tuesday that consumer confidence has fallen to a 15-month low. And although the CBI might report a pick-up in retail sales growth in May, this would only reverse April's weakness.

What's worrying is that there might be fundamental reasons for consumer spending to falter. Stagnant productivity will stop real wages from rising much - which will cap spending.