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Opinion

Next week's economics: 27-31 March

Next week's economics: 27-31 March
March 23, 2017
Next week's economics: 27-31 March

On Tuesday, the Conference Board should report that US consumer confidence is high - perhaps at its highest level since 2000. Such optimism would be consistent with a report from S&P the same day, which could show that house price inflation has picked up.

Such confidence is shared by Europeans. Monday's Ifo survey could show that German manufacturers are reporting not just the strongest current trading conditions since 2011 but also increased optimism about future demand.

One reason for this confidence might be evident in other numbers on Monday. The ECB is likely to report that bank lending is now accelerating.

Consistent with this, official figures on Friday should show that unemployment in the eurozone has fallen. However, the rate of 9.5 per cent is probably not so low as to raise inflation: figures the same day should show that the core inflation rate in the region (which excludes food and energy) is flat at just under 1 per cent, although overall inflation might have risen to 2.1 per cent due to higher oil prices.

And in Japan, official figures should show a recovery in industrial production in February, having dipped in January.

We'll get some evidence that the UK is sharing in this upturn. Friday's figures should show that our current account deficit narrowed in the fourth quarter thanks to rising export volumes, and that this contributed to the economy's 0.7 per cent growth in the quarter. And if Wednesday's figures confirm those of the previous month, they'll show that bank lending to companies is rising, suggesting some companies are spending more.

We might, however, also see some warning signs. Bank of England figures might show that growth in consumer credit is slowing down. This would be consistent with consumers now reining in their spending, having bought a lot in the autumn in anticipation of rising prices. It might also be consistent with a report on Friday from Gfk, which could show that consumer confidence is now weakening because of falling real wages - although low unemployment should mitigate the decline.

It's not just consumers who are reluctant to spend, however. So too are companies. National accounts data could show that these ran a bigger financial surplus in the fourth quarter, as profits rose but capital spending dipped. This surplus - which has been a persistent feature of the economy since the tech bubble burst in 2001 - is one worrying symptom of secular stagnation.