Week ahead 21st September

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Here’s a Monday morning look ahead at the data and events relating to UK manufacturing.

 

Public Finances

Tomorrow the ONS will publish Official Statistics on the UK’s public sector finances for August 2015. Interest in public finances has somewhat evaporated in the aftermath of the General Election. However, given the Government’s commitment to a budget surplus by 2019/20, policy-makers are likely to be closely monitoring the situation.

The July release showed the first surplus in the public sector’s coffers in three years. This came on the back of a boost from tax receipts of around 4%, toppled with a decline in net borrowing of £1.4bn.  Taken together this brought net public debt to GDP down to 80.8% from 81.4% in June. Still, that was higher than the 79.7% recorded in the financial year to July 2014. July is traditionally a month of higher tax receipts, so we expect a slight month-on-month deterioration to the government’s balance sheet in August.

 

World Trade

These are tough times for world trade. The stock market crash in China in combination with a slowdown in its real economy have been weighing heavily on global export demand. While its other emerging markets – particularly commodity and investment goods exporters – that are bearing the brunt of China’s slowdown, advanced economies are not emerging unscathed either.

In June the CPB World Trade index increased 2% month-on-month, after a decline of 1.3% in May. Nevertheless, world trade is down 0.5% in q2 2015, following a 1.5% decline in q1. The July release out on Thursday will give us a good flavour about what to expect from world trade in q3. Given that July saw the re-escalation of the Greek crisis in the Eurozone and the stock market crash in China, we are bracing ourselves for a poor outturn.

 

Upcoming blogs

Tue: Rugby World cup

Wed: What if the oil price jumped back to $100?

Thu: World trade

Fri: Canon photography competition  

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