The week ahead 13 April 2026 - The US economy slows
What to watch out for in the UK economy and property market this week.
The war in the Middle East continued to dominate the headlines last week, and as a result, data confirming that the US economy was slowing before the conflict began received less media attention than one would normally have expected. Orders placed with US factories for durable goods (ranging from lorries to aircraft to machinery) fell by -1.4% in February on a month-on-month comparison. This was the third consecutive month of decline, and below the consensus forecast of -0.5%. Also, the Q4 2025 US GDP figure was revised downwards from 0.7% to 0.5%.
This suggests the American economy had been slowing for several months even before the war broke out. The pressure the war is heaping on US consumers continued last week with the national average petrol price hitting $4.15 a gallon, up from $2.98 on the eve of the war (an increase of 39% in just six weeks). US CPI inflation rose from 2.4% in February to 3.3% in March.
Turning to the financial markets, 10-year UK gilt yields were trading on Friday afternoon at 4.76%, up from 4.23% on the eve of the war, but below its recent peak of 4.95% on 24th March.
New UK car registrations were up by an impressive 6.6% in March compared to a year ago, according to SMMT. Over 380,600 new cars were registered, marking the strongest March since 2019. All of the growth came from battery and hybrid vehicles, which more than counterbalanced the fall in sales for petrol and diesel cars. Several motor sales web sites have reported increased searches for electric vehicles in recent weeks. We see events in the Middle East spurring the rush towards electrification and renewable energy, which will have major implications for UK property, from installing charging infrastructure and battery storage in new developments to the construction of wind and solar farms.
This week sees data for February released on UK GDP growth and Euro Area industrial production.
Most indicators for February point to sluggish conditions in the UK economy, and GDP flatlined in January. Consequently, we have low expectations for the February GDP figures and are predicting marginal growth. Taking into consideration the impact of the war, GDP growth for the first half of this year looks set to be disappointing.
Similarly, there is little reason for optimism on the Eurozone industrial production numbers; indeed, December and January saw month-on-month declines. We are predicting a modest pick-up in February as firms restock inventories, but probably with the trend of decline resuming in the March data.
The Bank of England Governor, Andrew Bailey, will be giving speeches this week, which will probably give some indication of his thinking on the outlook for interest rates.
This week’s figures
WEDNESDAY 15 APRIL
Euro Area Industrial Production, m-on-m, February
-1.5% PREVIOUS
0.1% FORECAST
The Eurozone’s industrial sector has had a difficult winter, with output falling in December and January. Although we are expecting some inventory demand in February, the growth rate in our opinion will be slow.
THURSDAY 16 APRIL
UK GDP, m-on-m, February
0.0% PREVIOUS
0.1% FORECAST
The data we have already for February points to subdued levels of activity, although with slightly more strength among businesses than consumers. We are forecasting modest growth.
