Surveys of purchasing managers show that manufacturing and construction activity both fell in February, which economists don't think is wholly due to the cold weather. Concerns about the economy could increase next week when the National Institute of Economic and Social Research publishes its monthly estimate for GDP, which is expected to show no growth in the three months to February, and when official figures are likely to show that net exports have subtracted from GDP in recent months.
External demand might remain weak, warns Jamie Dannhauser at Lombard Street Research. He points out that export orders are already low, and could fall further as renewed uncertainty about the future of the euro and the effects of the US "sequester" (the automatic cut in government spending) depress demand.
Yet another problem is that the Funding for Lending Scheme seems - so far " to be failing to increase credit supply. Bank of England figures show that banks drew £13.8bn from the scheme in the fourth quarter but their net lending actually fell. But economists believe the scheme has succeeded in reducing lending rates, and this might have contributed to a recovery in house prices; Lloyds Banking estimates that prices in the last three months were 1.9 per cent up on a year ago.
The brightest signs for the economy come from retailing. The British Retail Consortium said this week that sales rose 4.4 per cent year-on-year in February, the best growth for three years. Thanks in part to this, purchasing managers say that service sector activity overall rose in February.
Paradoxically, then, the best hope for the economy lies not in a "rebalancing" towards exports but in a return to the old pattern of consumer and house price-led growth.
Chris Williamson at Markit says the improvement in the service sector means we might have avoided a fall in GDP in Q1. But, he says, the best we can expect is a "modest and hesitant upturn".
This is bad for savers. Alan Higgins at Coutts Bank warns that Bank Rate might not rise until 2017, implying four more years of nugatory returns on cash.
