You are here:

Next week's economics

Created:
18 November 2008
Written by:
Chris Dillow

Chancellor Alistair Darling will give his 1970s-style crisis Budget on Monday, amid signs that the global economy desperately needs some lift.

Advertising

Before he stands up, news from the eurozone will confirm that the economy there is in deep recession, with industrial orders across the region sharply down and Germany's Ifo survey showing that business sentiment in the continent's biggest economy is depressed.

Later that day, the National Association of Realtors is expected to report that US sales of existing houses fell last month by around 2.5 per cent. But annualised sales of more than five million would be consistent with transactions having stopped falling since the spring.

This is unlikely to stop house prices plummeting yet; prices traditionally lag behind transactions as sellers are reluctant to cut asking prices. Tuesday's S&P/Case-Shiller report is likely to show house prices falling by almost 18 per cent in the last 12 months.

Then on Wednesday, statisticians' second estimate of UK third-quarter GDP is likely to confirm that the recession has begun - though a revision to the first estimate, of a 0.5 per cent fall in activity, is possible. The detail is likely to show that capital spending is falling sharply, despite high corporate profits.

Friday's figures could be the most important news of the week, though. The CBI's report on retailing and the NOP/GfK survey of consumer sentiment will give us the first signs of how consumers reacted to this month's surprise 1.5 percentage point cut in bank rate. If there's no glimmer of recovery, we should worry - because if monetary policy doesn't work in supporting the economy, there's even less hope that fiscal policy will.

  • Back to top

Win £1,000 or a golf weekend

Enter IC's Fantasy Portfolio competition for the chance of winning £1,000 or a luxury golf weekend, courtesy of ETX Capital and Celtic Manor.

Enter here for your chance to win

Advertorial Feature

Take control of your investing with CFDs

Have you ever watched a move in the markets that you saw coming, but you weren't able to exploit?

by Dominic Picarda

Advertorial Feature

Spread your risks with spread trading

With so many big moves in the world's financial markets, there have seldom been more opportunities around for spread traders. Isn't it time you joined them?

by Dominic Picarda