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Economic preview: UK and China look for signs of growth

By Neil Dennis

13:14, 9 April 2021

UK publishes March GDP data on Tuesday

At the end of a week when the International Monetary Fund raised its global growth forecasts, investors will be looking ahead to next week's busy calendar of economic data releases for signs of continuing recovery.

Gross domestic product (GDP) data is likely to be top of the list with the UK and China publishing their latest numbers on Tuesday and Friday respectively.

Elsewhere, there are details on the inflationary outlook across much of Europe, the US and Australia, while industrial production data will be in focus in the US, Europe and the UK.

UK GDP, trade and production

Recent purchasing manager index data for March have shown signs of renewed vigour across all sectors of the UK economy as the successful vaccine rollout against Covid-19 has boosted confidence and demand.

These measures, of course, are forward looking and Tuesday's GDP numbers for February are unlikely to reflect the full extent of the optimism seen in the PMIs.

Fourth quarter GDP grew at a quarter-on-quarter rate of 1%, but the annualised rate showed an economy that had shrunk by 9.9% on the previous year. The monthly data have been erratic, with a 2.3% contraction in December, followed by 1.2% growth in December and a 2.9% decline in January.

Economists expect monthly growth to have flattened in February, before continuing to improve thereafter as Britain emerges from its second wave of the pandemic.

“We anticipate a sharp decline in activity during the first quarter of the year. Nevertheless, growth will pick up from the second quarter onwards as restrictions ease on the back of a successful vaccination programme,” says Dr Kemar Whyte, senior economist at the National Institute of Economic and Social Research.

Investors will also be examining February trade data this week for any indications of further Brexit effects on UK-EU trade. In January, total UK exports fell by 19.3% due to a 40.7% fall goods sold to the EU, while total imports fell 21.6% after a 28.8% drop in goods from the EU. This left a trade deficit of £9.8bn. The balance is expected to worsen in February, extending the deficit around £12.5bn.

Economists expect, however, that industrial and manufacturing production data for February will start to reflect the pick up in demand suggested by recent PMI surveys. Having fallen in January by 2.3% from December, the decline in manufacturing production is expected to ease to around 0.8% in February.

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China GDP and trade

China's annual growth accelerated at 6.5% in the fourth quarter of 2020, and some predict it expand further to around 19% in the first quarter, thanks to its success in controlling fresh Covid-19 outbreaks.

While there may be a new President in the White House, there has been little thawing in the trade relationship between the US and China as the new administration keeps Trump-era tariffs in place and pledges to aggressively protect American jobs.


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US inflation and production

Since dipping close to $20, oil prices have trebled to around the $60 a barrel over the last year as the Covid-19-related collapse in demand eases. This is having an impact on inflation in the energy-hungry US as consumer prices continue to tick higher.

After a 0.3% month-on-month rise in January, the consumer price index crept up 0.4% in February and is expected to tick up to 0.5% in March. This could leave the annual rate of inflation at 2.4%, from 1.7% the previous month.

While 2.4% is above the Federal Reserve's inflation target of "2% over the longer run", the US central bank observed on Wednesday that inflationary risks were "broadly balanced", and maintained its outlook for ultra accommodative monetary policy to ensure strong post-pandemic growth.

Production, meanwhile is expected to indicate an economy moving quickly to put behind it the troubles of the previous year. Industrial product is seen rising by 1.6% in March after a 2.2% contraction in February.

Summary of data releases April 12-April 19


  • Japan bank lending (Mar)
  • Japan producer prices (Mar)
  • Japan machine tool orders (Mar)
  • China foreign direct investment (Mar)
  • China new loans money supply (Mar)
  • India industrial production (Feb)
  • India consumer price inflation (Mar)
  • Eurozone retail sales (Feb)


  • China trade balance (Mar)
  • UK trade balance (Mar)
  • UK monthly GDP (Feb)
  • Italy industrial production (Feb)
  • Eurozone ZEW survey (Apr)
  • US consumer price inflation (Mar)


  • Japan machinery orders (Feb)
  • New Zealand interest rate decision
  • Australian consumer confidence (Mar)
  • Spain consumer price inflation (Mar)
  • Eurozone industrial production (Feb)
  • US import and export prices (Mar)


  • Germany consumer price inflation (Mar)
  • France consumer price inflation (Mar)
  • Italy consumer price inflation (Mar)
  • US retail sales (Mar)
  • US industrial production (Mar)
  • US weekly jobless claims
  • US Empire State manufacturing survey (Apr)
  • US Philadelphia Fed manufacturing survey (Apr)


  • China GDP (Q1)
  • China industrial production (Mar)
  • China retail sales (Mar)
  • Eurozone trade balance (Feb)
  • Eurozone consumer price inflation (Mar)
  • US University of Michigan consumer sentiment (Apr)

Corporate earnings calendar highlights April 12-April 19

The first big week of first quarter earnings always brings out the US banking sector. Here are the highlights for this week:

  • Monday: Petrofac
  • Tuesday: JD Sports, Century Bancorp
  • Wednesday: JPMorgan, Wells Fargo, Goldman Sachs, First Republic, Tesco
  • Thursday: Bank of America, BlackRock, US Bancorp, PepsiCo, Delta Airlines, Alcoa
  • Friday: Morgan Stanley, General Electric, Bank of New York Mellon, Citizens Financial, State Street
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