Five things to look out for in the economy this week

This Monday, 9 January, ten years ago, Steve Jobs announced the iPhone at the Macworld convention. You had to wait until June before you could buy one, and it was in May that Steve Ballmer, chief executive of Microsoft, made his famous prediction:

“There’s no chance that the iPhone is going to get any significant market share. No chance.”

But of course we now know that it changed the world. So let’s start this week by looking for technologies that will transform the next ten years, in the same way that the iPhone did.

There are plenty of candidates, but the one that jumped out for me is the potential of voice services. There is a leader in this week’s Economist, which points out that voice is our natural medium of interaction. It is much easier than keyboards, drop-down menus, even touch screens. Voice recognition is racing ahead. Couple that with artificial intelligence and the possibility of transforming communication is huge. There is a section about this in Exponential View, a weekly update of what is happening in technology by Azeem Azhar.

On the narrower economic front, look for upgrades to UK economic forecasts for this year. Capital Economics has just upped its estimate for growth to 1.8 per cent, which would mean not much of a slowdown from last year’s growth of around 2.1 per cent. Most other forecasts are between 1 per cent and 1.5 per cent, so this is very much an outlier. But the economy clearly still has a lot of momentum, and a combination of retail competition and a possible recovery in sterling should hold down price rises.

The next thing to see will be whether the welcome the markets have given 2017 can be sustained. It has been a really strong start to the year, following a strong December, for most major markets. Quite what is driving this is not at all clear. Economic news for Europe, the US and the UK is all strong, but so too is the expectation of rising interest rates. The US economy is now pretty much at full capacity. But a market boom like this cannot last forever. Look for cracks in confidence.

We should also learn more about appointments to the Trump team. These will be scrutinised for signals about the likely competence or otherwise of the new Administration, which is really the most important issue facing the world in the months ahead. Fingers crossed.

And finally, there is a useful reminder coming up in the UK on Friday that economics is the servant of the people. The Office for National Statistics is publishing estimates of personal well-being, a much better measure of real wealth than GDP per head. GDP remains the skeleton on which other economic data are hung, but what we really care about is how people live and feel about their lives. It is good to be reminded of that.