What’s happening to high street spending? We’ll get a clue in official retail sales figures on Thursday. These have recently been volatile, but they might show a recovery in June after falling in May. This would imply growth of over 1 per cent in the second quarter, although it would still leave sales well below October’s peak.
Few economists, however, will be convinced by such a rise. With real wages stagnating and households needing to rebuild savings (the savings ratio fell to a record low in the first quarter) the prospects for spending aren’t good.
One problem for consumers might, though, be almost over. Tuesday’s numbers could show that consumer price inflation has remained around 2.9 per cent, which might be close to its peak. This is because prices have risen because of the weak pound, and its impact is now mostly over.
Evidence for this will come in producer prices the same day. These could show that input prices have fallen by more than 2 per cent since January, and that the inflation rate has halved since then, from 19.9 per cent to around 10 per cent. Thanks to this, output price inflation might already have peaked, with the rate dropping from last month’s 3.5 per cent.
Overseas, we should see yet more evidence of decent growth.
Surveys of manufacturers by the New York and Philadelphia Feds should show that output and orders are growing well – although the latter might show that companies are less optimistic than they were earlier this year.
In China, official figures could show annual growth of just under 7 per cent in both GDP and industrial production. Economists are, however, sceptical about the reliability of these numbers; the latest purchasing managers’ survey suggests output is barely growing.
And in Germany, the ZEW survey should show that finance professionals are moderately optimistic about future growth.
On Thursday, we should get some clarification on monetary policy from the European Central Bank. President Mario Draghi recently worried bond markets by hinting that rates could rise. He’s likely to use the press conference, however, to say that this won’t happen for some time given that core inflation is still well below its target (of just under 2 per cent) and showing no sign of rising quickly.
