Northern Ireland’s economic miracle?

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We saw further evidence last week in the form of the output figures for manufacturing and services that Northern Ireland’s economy has been outperforming the rest of the UK. This follows recent experimental data from ONS which showed Northern Ireland’s relative recovery from the pandemic has been second only to London. We also know that Northern Ireland has the lowest level of unemployment in the UK. So, is Northern Ireland experiencing some kind of Protocol-fueled economic miracle? The reality is, ‘it’s complicated’.

HAFNIA SOYA unloading oil at Belfast Harbour Northern Ireland
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Chief Economist’s Weekly Briefing – Central Banking Time 

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Monetary policy was at the forefront last week as central banks across the world took a hawkish shift in their battle again inflation. We had the 5th Bank of England hike with no signs of stopping, a US Federal reserve rise of 75 bps – biggest in almost 3 decades – and the European Central Bank announced an end to stimulus measures and expected to raise rates next month.

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Northern Ireland Labour Market – As good as it gets?

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Despite the upsurge in recessionary chatter, Northern Ireland’s labour market continues to churn out positive headlines. The ILO unemployment rate in the three months to April stood at 2.6%, just north of Q1 2020’s pre-pandemic level (2.5%) and the record low of 2.3% (Sep-Nov 2019). Both the HMRC payrolls data and the Quarterly Employer Survey (QES) posted record employee numbers for May and March 2022 respectively. Meanwhile there is still nothing of note on the redundancy front. From a recession watch perspective there is certainly ‘nothing to see here’ as far as the local labour market statistics are concerned. 

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Chief Economist’s Weekly Briefing – The Stagnation Nation

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The OECD’s updated outlook revealed that we are on course to be the stagnation nation, as new forecasts suggested the UK would experience the weakest growth in the G20 outside Russia next year. Why? Well, a combination of factors – high inflation, rising rates and increasing taxes. In the meantime, a further rate hike from the Bank of England is anticipated later this week, even with a weaker GDP figure this morning. Meanwhile Brexit afficionados wait with bated breath on the PM’s plans to scrap parts of the NI Protocol.  

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Business activity falls for the first time in 14 months

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Today sees the release of May data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – signalled reductions in output and new orders as steep inflationary pressures hit demand. Indeed, output price inflation was at a record high. The impact of price pressures also hit business expectations, which turned negative. On a more positive note, employment continued to rise.

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Chief Economist’s Weekly Briefing – Pressure building up

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After sizzling-away throughout the pandemic, the UK housing market may finally be losing some of its heat: the cost of living crisis and higher interest rates are squeezing demand, with mortgage approvals sliding to the lowest level in two years. Meanwhile the EU decision to tighten the embargo on Russian oil by year-end drove Brent crude prices to the highest level in months. Locally, SSE gas customers were warned of a hefty 42.7% price increase coming into effect next month. Ouch!!

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Episode 19 | Hiking season returns… time to head for the hill featuring Jordan Buchanan – May 2022

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The podcast that keeps you up to date with what is happening economy-wise in Northern Ireland.  Telling you what you need to know but not necessarily what you want to hear. It is better to be prepared for the economic environment we are operating in and not the world we would like to be in.

Featuring Jordan Buchanan – PropertyPal Chief Economist

We’ve become well used to price hikes with rampant inflation.  But April was marked by tax hikes with the increase in National Insurance Contributions hitting the pockets of many employees as well as employers. The attention now though is very firmly on interest rate hikes with the Federal Reserve having just delivered its first half a percentage point rate increase in 22 years with more to come as the Fed seeks to tame inflation which is at 40-year-high.

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Chief Economist’s Weekly Briefing – Top Targeting

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Last week brought good and bad news for households facing a cost of living crisis.  First, the bad: Ofgem gave early warning that it expects to raise the default tariff by an eye-watering 42% in October.  That will push typical gas and electricity bills to £2,800.  Better news comes from the Chancellor of the Exchequer, who unveiled a fresh package of measures to support households (with giveaways partially funded by a windfall tax on oil and gas companies).  It’s big, timely and well targeted. The burning question is: will these new fiscal measures add fuel to the inflationary fire or not?

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No Netflix and chill, and hold the popcorn and Pringles…

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In practically every economy, bar perhaps the likes of China, consumer spending is the dominant factor in driving economic growth. In recent years, the pandemic and lockdown restrictions turned consumer spending habits on their head. When it wasn’t possible to spend money on certain things such as holidays and hospitality, we doubled down on our online spending on garden furniture, home entertainment, fitness products and all manner of other things. Indeed, we saw a dramatic change in spending habits in a matter of weeks that under normal circumstances would have happened over many years.

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Chief Economist’s Weekly Briefing – Back to 1982 or 1974?

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Inflation has soared again in April and the UK now has the highest rate of inflation in the G7. European as well as UK households are enduring a cost-of-living crisis; and for the UK the situation is set to worsen in October when energy price cap is expected to be raised again. In the meantime, the global food system is under threat due to the war. Wheat prices surged further, after India – the world’s second largest producer – said it would suspend exports. Hadly surprising then that the mood is darkening.

Inflation written newspaper close up shot to the text.
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