Chart of the Month – Economic Surprise Index


More than three months have passed since the UK’s EU Referendum result. Since then we have become all too familiar with three words “Brexit means Brexit”. The economic impact to date could also be summed up in three words: better than expected. The Citi Economic Surprise Indices measure data surprises relative to market expectations.  A positive reading means that data releases have been stronger than expected.  Conversely, a negative reading means that data releases have been worse than expected. During the month of May the incoming UK economic data was much weaker than market expectations, hence the negative readings with the Surprise Index.  However, following the EU referendum on 23rd June there has been a steady stream of better than expected data. Indeed, the UK Economic Surprise Index recently hit a three-year high. Economic indicators ranging from the labour market to retail sales have exceeded the consensus opinion amongst analysts in recent months. While economic conditions following the post-Brexit vote have not been as bad as feared, it is too early to draw any firm conclusions on the economic impact from Brexit.  After all, Brexit hasn’t taken place yet and the UK remains in the EU. Furthermore, we don’t have any clarity on what type of Brexit deal the UK Government envisages or what the EU will accept.

Sterling taking a pounding but will we be trumped by inflation?

When people cast their EU Referendum vote on June 23, I suspect not many would have seen it as a ballot on the price they would pay for their next iPhone. But, in a sense, it was, as the proceeding fall in the value of the pound Sterling has had wide-ranging impacts for the economy – both good and bad – including the price we pay for goods. Continue reading

Chief Economist’s Weekly Brief – The fall

UK businesses appear in decent shape. Turnover is up as are Corporation Tax receipts. Yet sterling has lost roughly one-tenth of its value since June and that’s raising input costs and squeezing profits. A long summer of falling costs boosting profits is coming to an end. Continue reading

Podcast – latest labour market and output figures


A raft of economic data was released today covering the labour market as well output figures. The figures are broadly positive – not least the fact that the number of people claiming unemployment benefit has fallen.

However, there are a number of challenges – notably the fact that the number of people claiming other benefits is actually rising by as much as the number of people claiming unemployment benefit is falling. Listen to our podcasts to hear more.

Labour market figures


Output figures

August sees rise in output following decline in July


Today sees the release of August data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by Markit – pointed to a rise in activity following the previous month’s decline. That said, new orders decreased for the second successive month. The rate of input cost inflation accelerated to the fastest since November 2011 and firms also raised their output prices at a sharper pace. Continue reading

Today’s cost of saving crisis…tomorrow’s cost of living crisis?

In economics, we’ve become well accustomed to the word crisis over the past 10 years. We’ve had the banking crisis and the government debt crisis, to name a couple. Two years ago, we also became familiar with the oft-quoted ‘cost of living crisis’, when food and other prices were rising and wages were stagnant. Today, it could be said that we are in the era of the pension crisis, with the topic of provisioning for retirement very much to the fore.  Indeed, earlier this month Baroness Altmann, the former UK pensions minister, said that pension funding had reached “crisis point” and blamed the Bank of England’s quantitative easing policy of buying bonds. Continue reading