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OPINION

Next week's economics: 28 April - 2 May

Next week's economics: 28 April - 2 May
April 24, 2014
Next week's economics: 28 April - 2 May

However, this would still leave real GDP lower than it was at its peak six years ago. This would mean this recession has been the worst this century, in the sense that even in the 1930s depression we didn't see a six-year fall in GDP.

What's more, there will be a couple of doubts about whether this expansion can continue. Purchasing managers are likely to report that although manufacturing output is growing well, it is not doing so at the same rate as over the winter. And figures from the Bank of England on Thursday might show that companies are still paying down debt - which would cast doubt over official forecasts for a big rise in capital spending.

We'll also see mixed signals about the housing market. The Nationwide is likely to report that prices have risen almost 10 per cent in the last year. However, Bank of England figures could show that mortgage lending is growing by only a little more than 1 per cent year on year and that mortgage approvals are still one-third below their pre-crisis peak. This would be consistent with prices being driven up by a lack of supply and by foreign buying rather than by reckless borrowing.

In the euro area, purchasing managers' surveys should point to modest growth in output. However, ECB data on Tuesday are expected to show that bank lending is holding back the recovery; loans to the private sector are likely to be 2.3 per cent down on a year ago, although the pace of decline might be slowing.

In the US, the first official estimate of GDP could show that the economy grew at a lacklustre rate of only slightly more than 2 per cent annualised (0.5 per cent unannualised) in the first quarter. However, economists might dismiss this as an artefact of bad weather. And some figures in the week might paint a brighter picture. We could see a rise in consumer confidence, increase in the ISM's index of manufacturing activity, and perhaps a rise of over 200,000 in non-farm payrolls. All this would increase optimism that the second quarter will see better growth.

Such growth has a downside, though - the Fed will withdraw monetary policy support. On Wednesday, it is likely to announce another reduction in its rate of quantitative easing.