Next week's economics: 6 - 10 April

Official data could show that industrial output was flat in France and Germany in February, after big rises in January. This means it was above its autumn lows, albeit still well down from its peak – which in Germany’s case was as long ago as November 2017. Italian industrial production was also recovering before the virus hit, but next week’s data should show the first impacts of the lockdown in depressing output.

That upturn was helping the UK. Thursday’s data will show that the UK’s trade deficit in the past three months was much narrower than it was for most of last year. Part of this is because of a surge in reported exports of gold, which is merely a paper transaction. But there has also been a narrowing in the underlying deficit. This reflects a slight increase in exports, helped by the small recovery in the euro area, and also an end to the precautionary stockpiling that occurred before Brexit.

Thanks in part to this increase in net exports, Thursday’s data could show that GDP grew slightly in the three months to February – by around 0.2 per cent, although within this manufacturing is likely to be down.

Of course, all these numbers are out of date. Output will collapse in March and April as a result of Covid-19 lockdowns, and nobody knows when it will recover. But at least it will collapse from a slightly higher level than a few months ago.

We’ll also get news on house prices in March from the Halifax. The lockdown in the second half of the month means there will be very little activity, so prices are likely to be little changed. But the annual inflation rate could be around 3 per cent, up from the sub-2 per cent we saw in the middle of 2019. This would confirm that the housing market was firming up before Covid-19 hit. However, the rise in unemployment and drop in incomes might well reverse this – especially to the extent that the disruption reduces buyers’ appetite for risk even after the economy has recovered.