Week Ahead (10 April)

Thursday, 13 April – ONS GDP monthly estimate for February in the UK

On Thursday, the Office of National Statistics (ONS) will release its GDP monthly estimate for February, indicating whether the UK economy will avoid contracting for a second consecutive month. Last month’s release for January demonstrated a return to growth with 0.3%, following a contraction of 0.5% in December. Data suggested that this return to growth was largely driven by the services sector and an economic rebounding of education, transport, human health and activities, and entertainment, following the disruption caused by widespread industrial action and strikes in December.

The UK narrowly avoided a technical recession in Q4 2022, following a contraction of 0.2% in Q3 2023. Nevertheless, the UK is the only G7 country yet to fully recover its lost output during the pandemic, with its level of GDP in Q4 2022 being 0.8% below its pre-Covid level at the end of 2019. Forecasts from the Bank of England (BoE) and the Office for Budget Responsibility predicted that the UK economy would shrink in the first half of 2023. However, it remains to be seen whether the UK economy will beat economists’ expectations for a second consecutive month.

Despite growing fears of a recession, the BoE announced last month its eleventh consecutive rate hike, by raising interest rates by 25 basis points to 4.25% in an attempt to curb inflation which is still more than five times higher than the bank’s declared target rate of 2%, after rising by 10.4% in the 12 months to February 2023.

Thursday, 13 April – CSO to release data on consumer prices in Ireland

The Central Statistics Office will release its Consumer Price Index data on Thursday, covering the situation through March.

February’s Consumer Price Index data release revealed that prices were 8.5% higher than during June 2021, with notable jumps in prices for housing, water, electricity, gas, and other fuels (up by 26.0%) and Food & Non-Alcoholic Beverages (up by 13.1%). This was the 17th straight month where the annual increase in the CPI has been at least 5.0%. It also marked an unexpected rise from 7.8% in January, ending the downward trend of the previous two months.

Nevertheless, according to CSO’s flash estimate, this week’s release is expected to confirm an easing of inflation in March, following February’s surprising spike.

Thursday 13 April – Friday 14 April, Borrell to visit China, following Macron’s and von der Leyen’s joint visit last week

The diplomatic overtures between Europe and China have intensified in recent months, with several high-level visits taking place between the two powers. German Chancellor Olaf Scholz, European Council President Charles Michel, Spanish Prime Minister Pedro Sanchez, and French President Emmanuel Macron have all traveled to Beijing to hold talks with Chinese leaders. The latest visit will be by Josep Borrell, the EU's High Representative for foreign affairs and security policy, who is scheduled to visit China only a week after Commission President von der Leyen and French President Macron's visit.

These diplomatic efforts aim to strengthen the relationship between Europe and China and restore trade ties after the COVID-19 pandemic disrupted global commerce. However, the EU has also raised concerns about China's position on Russia's actions in Ukraine. Borrell has warned that "its position on Russia’s atrocities and war crimes will determine the quality of our relations with Beijing’’.

While the visits suggest a renewed focus on diplomacy, the EU's main political ally, the US, has been ramping up its anti-Beijing rhetoric, potentially complicating Europe's relationship with China. It remains to be seen how these developments will impact the future of EU-China relations, and whether the diplomatic efforts will lead to a strengthening or a further fracturing of the relationship between the two sides.

Friday, 14 April - Deadline for the European Data Protection Board to issue its binding decision on the Meta data-transfer case

On 14 April, the European Data Protection Board (EDPB) will issue its binding decision on the Meta data-transfer case.

Last July, the Irish Data Protection Commission (DPC) sent a draft decision to its European counterparts, proposing to block Facebook’s parent company, Meta, from transferring the personal data of EU residents from the EU to the U.S. The DPC subsequently circulated the decision to the other data protection authorities in Europe to provide their own inputs and objections, otherwise, the decision would have become legally binding. However, in the absence of a resolution of the objections raised by the other authorities, the DPC triggered a dispute resolution mechanism under Article 65 of the GDRP in late January, referring the decision to the EDPB’s dispute resolution mechanism. The EDPB will have to issue a binding decision by Friday, approved by a minimum of two-thirds of its members.

The dispute stems from a privacy complaint filed by Austrian campaigner Max Schrems in 2013. A new Transatlantic Data Privacy Framework aiming to address the current regulatory gap is expected to come before the summer, pending the European Commission’s ratification process. If the EDPB decides to ban Meta from transferring the personal data of EU residents from the EU to the U.S before the finalisation of the new transatlantic data deal, this could temporarily lead the company into a legal vacuum. Notably last year, Meta threatened to terminate the operation of Facebook and Instagram in Europe in case the EU confirms the order, issuing a ban on transatlantic data transfer of EU residents.