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Opinion

Next week's economics: 23-27 Feb

Next week's economics: 23-27 Feb
February 18, 2015
Next week's economics: 23-27 Feb

In the UK, the CBI is likely to say on Monday that retail sales grew strongly in the year to February, while Gfk should say on Friday that consumer confidence is high. Both will reflect in part the effect of lower petrol prices.

In the euro area, Germany's Ifo survey could show a fourth successive monthly rise, while the National Bank of Belgium's business climate indicator - a good measure of euro area conditions generally - might reverse its recent falls. We might even also get some good news from the banking sector. On Thursday, the ECB might report that bank lending to the private sector has shown a second successive rise, reversing years of net debt repayment.

China too might be sharing in the recovery. A purchasing manager's survey on Wednesday could show that manufacturing output has stopped falling.

And in the US, durable goods orders should post a rise, after falling sharply last month.

Other US figures will show that lower oil prices are depressing inflation. The headline inflation rate is likely to have fallen to around 0.6 per cent in January, its lowest rate since 2009, while the core rate (which excludes food and energy) should drop to 1.5 per cent, its lowest rate since 2010. Lower commodity prices, then, are offsetting the potentially inflationary effects of falling unemployment. However, the Fed will judge this to be only temporary, so it probably won't stop it raising rates in the summer.

In this otherwise bright picture there could be a couple of grey spots.

In the US, statisticians might revise down their estimate for fourth-quarter GDP growth, from an annualised 2.6 per cent to around 2 per cent. Most economists, though, aren't much worried by this as they expect better growth to resume soon.

And in the UK, the second estimate of fourth-quarter GDP is likely to show that growth was due very largely to consumer spending, with net trade and investment contributing little. Hopes for a rebalancing of the UK economy away from consumer spending seem therefore to have been proven wrong.