UK RICS and BRC surveys may show a thaw in economic activity

By Hann-Ju Ho, Mark Mille

The British may be obsessed with the weather, but unusually cold conditions in January certainly affected some high frequency economic indicators, weighing on UK retail sales and mortgage approvals.

However, the arctic weather is likely to have supported January industrial production, due this week, via a boost to utilities output, while manufacturing output is forecast to have been more subdued.

Some February data are due from the British Retail Consortium (BRC) and Royal Institute of Chartered Surveyors (RICS) and the better weather should have supported activity.

Indeed, the CBI distributive sales survey was surprisingly strong in February and we should get a rebound in the new buyer enquiries index in the RICS survey, though the house price balance may be little changed.

Overall, it looks as if the economy continued to expand in the first quarter, but there are certainly good reasons to be cautious about prospects, not least because underlying domestic demand is likely to remain subdued and export growth has yet to benefit fully from the weaker pound.

MPC members, including Barker and Dale, will provide their thinking on economic prospects this week.

Following Greece’s bond sale success last week (see below), it will be the turn of the UK this week to offer £3bn of 2022 nominal bonds and £0.9bn of 2032 linkers.

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* All charts are sourced to Lloyds TSB Corporate Markets Economic Research, Bloomberg, IMF and Datastream

 


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