Chief Economist’s Weekly Briefing – 3 vs 2 to the doves

The recent jump in inflation and pockets of tight labour market conditions prompted two members of the Monetary Policy Committee (MPC) to indicate an earlier than anticipated tightening of policy. But with signs of softer activity three MPC members took a more ‘dovish’ stance. Looks like the Bank won’t break ranks with the Fed & ECB just yet.  

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The Great Resignation … why firms are seeing such a high staff turnover

2020 was a profound year for the economy at a global, national and local level. 2021 is also set to be an unusual year for the recruitment market too. Rather than the expected mass redundancies, economies around the world are seeing record numbers of vacancies. What is clear is that the pandemic hasn’t had the impact on the labour market that was expected. Talk of double-digit unemployment has been wide of the mark.

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Chief Economist’s Weekly Briefing – Freedom Day (caveated)

Freedom Day in England –  a much awaited milestone. Consumer behaviour, rather than restrictions, is in the driving seat now when it comes to gauging the recovery. But with daily cases surpassing January levels and a “ping-demic”, spending appetite might just be a little dented in the near-term. For now, the data continues to look robust. 

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Strongest growth of new orders for almost seven years

Today sees the release of June data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – signalled further strong increases in output and new orders as the loosening of COVID-19 restrictions continued. Inflationary pressures intensified further, however, with input costs and output prices both rising at the fastest rates on record.

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Chief Economist’s Weekly Briefing – Cautious

While the data on economic activity continue to look positive, the overall mood is that of cautious optimism. Cases are on the rise in various parts of the world. In the UK the wall of vaccines is so far proving effective against a rapidly building third wave.

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Chief Economist’s Weekly Briefing – Pausing for breath

After bumper readings in April and May, activity indicators are levelling off in the UK. Covid 19 cases have continued to pick up, with some hints that consumers have turned a little more cautious in response. But firms remain optimistic,  indicating they want to keep hiring. Meanwhile, despite the chatter on inflation, the Bank of England remain firmly of the view that it will prove temporary or ‘transitory’. So no monetary tightening coming any time soon.

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Chief Economist’s Weekly Briefing – Living with the virus

Following a strong rebound in economic activity, last week saw a slight pullback across macro indicators. While the public health experts in the UK are warning about future lockdowns, especially during the winter months, and PM Johnson confirmed the delay in full reopening by four weeks, there remains no obvious signs of consumer concerns yet. 

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Labour market recovery moves up a few gears in Q2 2021

The latest data download from NISRA represents the most positive set of labour market statistics since the pandemic arrived. All the key indicators moved in the right direction. Unemployment and economic inactivity rates fell in the three months to April relative to the previous quarter. Meanwhile the number of Northern Ireland employees on payrolls, hours worked and the employment rate all increased. Perhaps the only fly in the ointment was self-employment fell to a 19-year low and there was a pick-up in proposed redundancies in the first half of June albeit from very low levels. Today’s labour market statistics coupled with the recent Ulster Bank Northern Ireland PMI surveys for April and May signal that the local jobs recovery has moved up a number of gears in the second quarter. Indeed, May’s PMI posted the joint-fastest rise in private sector staffing levels in the survey’s nineteen year history. 

An easing of lockdown restrictions has facilitated a significant rebound in economic activity and employment. The successful and rapid rollout of vaccines also effectively ensures that the severe lockdowns of the past will not be required in the near future. However, it is important not to get carried away. This stage of the economic recovery was always going to lead to the strongest rates of growth and pick-up in hiring. Indeed the HMRC payrolls data may reveal a return to pre-pandemic employee levels as soon as next month.

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Chief Economist’s Weekly Briefing – ‘Promising Signs’

Against the backdrop of threats of ‘sausage wars’, the latest economic data is encouraging. This signals not only an economic rebound but also the success of the vaccination roll-out and support policies from the year gone by. Can a delay to full reopening turn the tide?  Most think not. But one thing to watch our for is whether some households turn a little more cautious as the rate of infections rises.  

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