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The Week Ahead ...
The Week Ahead

11:30 Tues 23 July - CBI Industrial Trends Survey (July): Economists are looking for confirmation of a modest improvement in the fortunes of manufacturing industry, following slightly more optimistic survey evidence from the British Chambers of Commerce and purchasing managers.

09:30 Wed 24 July - Retail Sales (June): After a 0.1% falling sales in May, largely attributed to poor weather, a rebound of 0.8% is expected in June, lifting the annual growth rate to 2.3%.

09:30 Thurs 25 July - Non-EU Trade (June): A deficit of £900m is forecast, following May's £834m shortfall.

09:30 Thurs 25 July - Whole World Trade (May): Preliminary figures for non-EU trade suggest the deficit will narrow from £1322m in April to £1200m in May.

Thurs 25 July - Start of Parliament's Summer Recess.

09:30 Fri 26 July - Preliminary Q2 GDP: The market is expecting a 0.4% rise, the same as in the first quarter. A much stronger number would make it harder for the chancellor to justify another base rate cut.

The Week Just Past

The British Retail Consortium reported the value of retail sales running 7% higher in June than a year earlier. An annual growth rate of above 6% in the last two months was well above the average rate of growth of 4.1% seen during the first four months of the year. Housing-related sectors such as furniture and carpets reported strong business.

The number of UK estate agents reporting price increases is the highest since October 1988 when the previous house price boom ended, according to a survey of more than 150 agents published today by the Royal Institution of Chartered Surveyors.

The Public Sector Borrowing Requirement stood at £3.6bn in June, the same as in May (revised up from £3.2bn). June's figure was disappointing given the benefits of a rescheduling of VAT payments. With a quarter of the financial year gone, the cumulative PSBR is £10.7bn, compared to £11.3bn at the same stage last year. If the PSBR continues to disappoint the Chancellor's new forecast of £26.9bn for the current financial year will not be achieved.

According to the latest Building Employers' Confederation Construction Trends Survey, the balance of UK firms reporting higher output improved sharply, from -10 to +31 between the first and second quarters of 1996. The survey suggests a sharp recovery in construction output in the second quarter, bringing an end to the recession in the construction industry which began in first quarter 1995.

The number of people unemployed fell by 14,300 in June following a decline of 14,800 in May, slightly above expectations. The unemployment rate was unchanged at 7.7%. Vacancies rose strongly last month, up 13,000, the largest increase in vacancies in this recovery.

Annual underlying average earnings growth fell unexpectedly, down from 3.75% to 3.5% between April and May, reflecting a 0.25% decline in service sector wages. Manufacturing sector wage growth remained unchanged at 4.0%.

Manufacturing unit wage costs grew 3.2% (latest 3 months on a year earlier) in May, down from 3.7% in April. Manufacturing employment fell a further 8,000.

As expected Bank of England governor Eddie George advised against the 0.25% cut in UK interest rates last month, according to the minutes from his June 5 monetary meeting with chancellor.

M4 money supply grew 0.7% in June, up 10.0% on the year. M4 growth has been above the top of the government's monitoring range (9%) for 8 months now, in part reflecting a gradual but sustained rise in personal-sector deposits.

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