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Next week's economics: 17-21 Oct

Next week's economics: 17-21 Oct
October 13, 2016
Next week's economics: 17-21 Oct

This will be most evident in producer input prices. Inflation here could rise to almost 8 per cent, its highest rate since late 2011, as the first effect of sterling's fall is to increase raw materials costs.

Manufacturers are partially passing these costs on. Output price inflation could rise to its highest rate since early 2014. Granted, the rate will be only around 1 per cent, but economists expect further rises in coming months.

We should also see that consumer price inflation rose to around 1 per cent last month, the highest rate since November 2014. Most economists think this is the start of a trend. They expect inflation to hit 2 per cent next year.

Wednesday's figures might show that the Brexit vote had a slight adverse effect upon employment. Single month data already released tell us that employment fell between May and July, and this might result in employment being flat for the three months to August relative to the three months to May.

Such weakness might, however, be short-lived: high levels of vacancies, plus purchasing managers' surveys, suggest that hiring picked up after July.

In fact, investors' problem might be that the labour market is so tight that it is raising wages. Wednesday's figures could show annual pay growth of around 2.4 per cent, whereas it was only around 2 per cent at the start of the year. Higher wages, allied to flat productivity and higher input costs, mean that profits might be squeezed.

Thursday's retail sales numbers could show that spending was flat in September after a weak August. Granted, quarter-on-quarter growth should be good thanks to a surge in sales in July (perhaps as consumers tried to buy ahead of price increases), but it's possible that we've seen the best of retailing growth for a while.

Overseas, we could see signs of faster growth. Official figures in China could show that industrial production grew by around 6.5 per cent in the year to last month, its fastest rate for six months. And official US data could show that output recovered in September from August's fall. Better still, surveys by the New York and Philadelphia Feds could show improved optimism for future activity.