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OPINION

Next week's economics: 27 April - 1 May

Next week's economics: 27 April - 1 May
April 23, 2015
Next week's economics: 27 April - 1 May

On Monday, the CBI is likely to report rises in output, orders and output expectations - although investment intentions might be a little dampened by political uncertainty. This would be consistent with Friday's survey of purchasing managers which should also show growth in manufacturing activity.

On Wednesday, the CBI is also likely to say that retail sales grew well in April. This would be consistent with a report the following day from Gfk that might show that consumer confidence has risen to a 13-year high.

This growth could be reflected in official real GDP figures on Tuesday. If these are consistent with NIESR's estimate, they'll show growth in the first quarter of 0.6 per cent - the same rate as in Q4. However, these numbers are provisional and subject to revision: on average, since 1993, the first estimate of GDP growth has been revised by 0.33 percentage points in subsequent data. For this reason, economists will put less weight on these numbers than politicians.

The euro area should also show signs of growth, with purchasing managers reporting on Friday that the recovery is gathering pace. One reason for this is that the squeeze on bank lending is over; ECB figures on Wednesday could show that lending to companies is now rising slightly.

One oddity in those numbers, though, will be that overnight deposits are rising sharply while long-term deposits are falling - implying that bank customers want liquid assets. You could read this as a sign that they are getting ready to spend more. Or it might be that they are loath to tie up cash with banks, for fear of a euro break-up.

Other figures could show that deflation has ended in the euro area; Thursday's flash estimate could show that CPI inflation has risen to zero thanks to rising petrol prices and the weak euro. But the core inflation rate (which excludes food and energy) will be way below the ECB target at around 0.7 per cent.

US figures, though, might not be so good. The BEA's first estimate of Q1 real GDP could show annualised growth of just 1.2 per cent (0.3 per cent unannualised) after 2.2 per cent growth in Q4. We'll find out how concerned the Fed is by this on Wednesday. It is likely to imply that it is in no rush to raise rates - although economists still think a rise could come in July.