UK GDP might have fallen. Tuesday’s figures might show that it dipped by 0.1 per cent in the fourth quarter. This would be only partly due to Brexit uncertainty depressing capital spending: other figures should show that business investment fell slightly in the quarter and has flatlined since mid-2016. Such uncertainty, however, cannot explain why retail sales fell at the end of last year.
This is not necessarily the start of a recession, however. The latest purchasing managers' survey showed a recovery in new orders in manufacturing thanks in part to a reduction in political uncertainty.
In fact, external trade figures are already good. Tuesday’s figures should show that the trade deficit narrowed in the fourth quarter, implying that net exports added to GDP. Indeed, the volume of goods exports might be up more than 10 per cent year on year in the quarter, despite weakness in the eurozone.