On Wednesday, for example, the UK government publishes the public sector net borrowing requirement (PSNBR) for July and the market will be watching to see if there is any improvement on June's £10.2bn figure, or indeed the £0.6bn of borrowing recorded in July last year. This was only the third time in 15 years that the July report failed to register a surplus, according to the Office of Budget Responsibility. The month is traditionally important for government revenue because it is when the first wave of corporation tax receipts starts to fill the coffers. If a genuine improvement in economic conditions actually happened in the UK during the second quarter, and the figures so far are only provisional, then the July borrowing requirement will reflect this in a more tangible way. The rate of debt expansion does seem to be slowing. For example, the average forecast for public borrowing is currently £107.5bn for 2013, compared with the £126bn the government had to find in 2012. The forecast for 2014 is £98.8bn.
Staying with the UK, on Thursday the initial gross domestic product figures are released and are expected to show a tangible improvement in the period up to June: GDP growth is forecast at 1.0 per cent, a 0.1 percentage point improvement on June's figure. This is a busy day for other UK economic indicators but, beside GDP growth, the most closely watched are likely to be exports/imports and the index of services.
The long-hoped for rebalancing of the UK economy has been given a boost recently by an increase in inward investment - the car industry seems to be going from strength to strength with Landrover expanding its plant on Merseyside, for example - which has led to an improvement in exports that could strengthen the UK's balance of trade significantly. The index of services is also an important indicator and should show if the monthly expansion seen in June has continued as previously parsimonious consumers loosen the purse strings slightly.
Chris Dillow is currently on annual leave.
