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Opinion

Next week's economics: 2-6 Feb

Next week's economics: 2-6 Feb
January 29, 2015
Next week's economics: 2-6 Feb

In the eurozone, final purchasing managers' surveys should confirm flash estimates, which showed manufacturing growing at its best rate for six months and services at their best for three. Official figures from Germany should be consistent with this picture. They are likely to show rises in new orders and in industrial production in December.

The euro area's pick up should help the UK. Here, purchasing managers' surveys should also show decent growth in both manufacturing and services. This suggests that any slowdown in growth since the summer has only been very slight.

Better still, Friday's official figures could show that net exports are contributing to growth, as the trade deficit narrowed in the final quarter of last year. This does not, however, necessarily mean that the long-awaited rebalancing of the economy has begun. The figures are likely to show that exports to non-EU nations have fallen in the last 12 months, which suggests that the UK has a problem with competitiveness and not just with weak demand from Europe.

Figures from Lloyds Banking might show that house price inflation is trending downwards. It's likely to have been around 8 per cent in January, compared with 10.2 per cent in July.

On Thursday, we'll see the Bank of England's interest rate decision. It will leave policy unchanged - something it might do throughout this year.

In the US, the most-watched numbers should show good growth. The ISM's survey of manufacturing could show that growth picked up in January, and Friday's employment report could show another rise of around 250,000 in non-farm payrolls and a fall in unemployment to 5.5 per cent, its lowest rate since May 2008.

Some less-noticed figures, however, should also be watched. Thursday's figures could show that non-farm business productivity grew at an annualised rate of around 2 per cent in the fourth quarter. This would be consistent with trend productivity slowing down. In the last five years, for example, it has grown at an annual rate of 1 per cent - half the rate in the 20 years before the crisis. This is consistent with a fall in trend GDP growth, which might be a sign of secular stagnation.