Join our community of smart investors
OPINION

Next week's economics: 21-25 Nov

Next week's economics: 21-25 Nov
November 17, 2016
Next week's economics: 21-25 Nov

The constraint will be evident in Monday's public finances numbers. These could show that net borrowing in April to October was around £50bn - only £5bn shy of the OBR's forecast for the financial year as a whole, which suggests that borrowing is on course to far exceed expectations. From an economist's point of view, this is a little problem: negative real interest rates mean borrowing is sustainable. Politically, though, the desire to pretend that borrowing is 'under control' might limit the chancellor's room to increase spending.

The need for a loosening will appear in Friday's GDP figures. These should confirm initial estimates that the economy grew by 0.5 per cent in the third quarter. But they'll show that this growth was unbalanced, with almost all of it due to increased consumer spending; business investment is likely to have fallen. This is a problem, because higher import prices might well depress consumption growth from now on: Friday's CBI survey could show this is already happening. With investment unlikely to rebound sufficiently to offset this, there's a danger therefore that growth will slow. A fiscal easing could offset this.

This is subscriber only content
Start your trial to keep reading
PRINT AND DIGITAL trial

Get 12 weeks for £12
  • Essential access to the website and app
  • Magazine delivered every week
  • Investment ideas, tools and analysis
Have an account? Sign in