Scottish economy: ‘Decent result’ expected from Q2

In contrast to the struggles of recent years, housebuilders are enjoying time in the sun Bellway expects to post a full-year profit of £139m. Picture: Contirbuted

Stephen Boyle, head of economics at RBS, says Scots can expect “a decent result” of 0.5 per cent, give or take a little.

The economist sagely points out that arguing over percentage points “is a latter day form of the medieval pursuit of counting angels dancing on pinheads”. He may well be right, but a few tenths of a percentage point will make all the difference for those seeking to make political capital.

UK data on employment, inflation and retail sales will complete a busy week for those assessing the economic recovery, but official US figures are off the calendar due to the shutdown.

Today

• Chinese inflation – Consumer price inflation figures for September will give a clue as to output figures which are due later this week, and will reveal how much headroom for stimulus remains in the world’s second-largest economy.

Tomorrow

• UK inflation – With little upward pressure from fuel or food prices, economists say UK inflation may well have eased slightly in September. The key CPI measure stood at 2.7 per cent in August, within the Bank of England’s target range.

• Bellway – Government efforts to pump up the housing market should ensure the housebuilder reports a year of surging profits and sales. Analysts on average expect the Newcastle-based group to post pre-tax profits of £139 million in the 12 months to the end of July, up from £105.3m year earlier.

• Burberry – The fashion house will update on demand for its trenchcoats and handbags with a trading update for the six months to the end of September. The firm has warned about the effect of slowing growth in China and the country’s wealthy shoppers, but it still reported 13 per cent underlying sales growth in the three months to the end of June.

Wednesday

• UK unemployment – Labour market figures have acquired new significance since the Bank of England effectively linked its strategy on interest rates to the level of unemployment. The jobless count is expected to have eased further in September as the economy continues to improve, possibly bringing the official rate down a notch to 7.6 per cent.

• Scottish GDP – Official figures will finally reveal how the Scottish economy fared during the second quarter of the year. UK-wide growth was a healthy 0.7 per cent, and industry measures suggest Scotland enjoyed its fair measure of that improvement, although in the past changes north of the Border have been less extreme.

Thursday

• Retail sales – Official figures are expected to echo the last survey from industry body the British Retail Consortium, which found that sales growth weakened significantly last month.

• Mothercare – The baby products retailer is expected to reveal a decline in UK sales when it updates on trading, although hopes that its turnaround is gathering pace will remain. The group saw UK like-for-like sales edge 0.9 per cent lower in its first quarter to 13 July, blaming an “increasingly promotional’’ market that hit demand for toys, home and travel products.

• Booker – The warm summer weather is set to have helped drive a rise in half-year profits for the cash-and-carry chain, after the heatwave boosted many of its wholesale restaurant customers. Booker has already cheered a ‘’good start to the year’’ after like-for-like sales rose 2.3 per cent in the first half 13 to September, excluding the recently bought Makro business.

Friday

• Chinese GDP – Economists say China’s output probably improved slightly in the third quarter of the year, after growthe fell to a 23-year-low rate of 7.5 per cent earlier this year.