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.
2020 will be remembered for many things but low energy prices is probably not one of them. Fuel costs have rocketed since then and are now centre stage within an evolving cost-of-living crisis for households. Those on Universal Credit – that’s around 134,000 in Northern Ireland – are particularly vulnerable having lost their temporary £20 per week uplift last month. Reduced income and rising costs are a nasty combo. Rishi Sunak’s latest Budget has improved things somewhat for those benefit claimants in work with an increase in the National Living Wage and a reduction in the Universal Credit taper whereby claimants will be able to keep more of their benefits if they work.
Nevertheless, with consumer price inflation set to exceed wage increases for the majority of the workforce an autumn and winter of discontent beckons. Further tax increases taking effect next April will add to the cost-of-living crisis. This incomes squeeze doesn’t look to be transitory. Ultimately, the only protection against a cost-of-living crisis is for wage growth to outpace that of inflation. But simply increasing wages without improvements in productivity is likely to lead to higher prices and no meaningful improvement in living standards.