Chief Economist’s Weekly Briefing – See Saw

The limelight last week was shared by the Bank of England and the Chancellor. The former delivered another 50-point rate hike trying to stem a runaway inflation. The latter sought to add some oil into the fire, with a huge set of tax cuts. But the market’s verdict was not generous. The pound tumbled to a record low of $1.035 and the gilt market on Friday had its worst day since the early 1990s.

Continue reading

Kwarteng throws a fiscal Hail Mary

This was a ‘kitchen sink’ Budget according to the BBC’s Faisal Islam, with the Chancellor throwing almost everything into it, including a wide range of tax cuts and incentives. A mini-Budget it wasn’t. But there was little to explain how it would all be funded. The shadow Chancellor Rachel Reeves perhaps explained it best when she said that “never before has Government borrowed so much and explained so little”.

Image Source: BBC News

Continue reading

Northern Ireland economy at a turning point?

Official statistics out earlier this week reported new record highs in the number of jobs. The labour market is a lagging indicator of economic activity with changes in output not impacting on staffing levels for a few quarters.  Meanwhile a trio of output surveys covering private sector services, industrial production and retail sales revealed a loss of momentum in the second quarter of 2022. However, the various surveys revealed that some aspects of the economy are clearly faring better than others. Private sector services saw activity ease (-0.3% q/q) from its’ recent peak,  with a more substantial fall occurring within the consumer sensitive retail sector. Manufacturing industry continued to expand in Q2 albeit the pace of growth halved relative to the previous quarter.  The cost-of-living crisis, the legacy of Covid-19 and the impact of the NI Protocol are very much evident in the latest figures.

Continue reading

Chief Economist’s Weekly Briefing – End of an era

To say that the past 70 years have seen some significant economic change would be a profound understatement. In 1952, one in three in the UK worked in manufacturing, it’s now one in 12. Almost 5% of folk worked in agriculture, less than 1% do now. The UK was the world’s third largest economy in 1952, behind only the US and the USSR, accounting for 10% of global merchandise goods trade. It’s around a quarter of that now. In 1952 women only accounted for under a quarter of first degrees, they now account for a majority. And for 60% of higher degrees. While female employment rates are up by a third. Transformations elsewhere were in abundance – from the ‘trente glorieuses’ of our European peers, Japan’s post-War miracle, the Asian tigers, and the rise of China and India. Condolences to everyone in the Royal Family. We have witnessed the end of an era, and pay tribute to someone who contributed, in no small part, to economic history.

Continue reading

Business activity declines for fourth month running

Today sees the release of August data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – indicated that the Northern Ireland private sector remained in contraction as demand continued to be impacted by intense price pressures. That said, there were further signs of inflation softening. Meanwhile, firms remained pessimistic about the year-ahead outlook and the rate of job creation softened to an 18-month low.

Continue reading

Chief Economist’s Weekly Briefing – Tick Tock

The countdown for the energy cap hike has begun. Amidst rising price pressures consumers are adjusting their behaviour, borrowing more, while businesses are easing up on hiring. But the impending strain will outlast winter, making government support even more urgent. Elsewhere, things don’t look any better. The Eurozone continues to grapple with soaring inflation while growth momentum remains lukewarm in China.

Continue reading

Podcast Episode 20 – The Cash Crunch with Sam McIlveen, NI Jobs – August 2022

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 Sam McIlveen, General Manager at NI Jobs (

Throughout August we’ve heard lots of comparisons between today and 1976, given the heatwaves and drought that affected both years. 2022 has been the UK’s driest year since and the driest in Europe for 500 years. Europe’s rivers, such as the Rhine, have been drying up with the record drought in China causing similar problems there. The Southwest of China depends on hydroelectric dams for three-quarters of its electricity generation. Rolling blackouts and business closures due to lack of power have become the norm. 

Continue reading

Chief Economist’s Weekly Briefing – Hard Times

An economic slowdown is becoming more and more apparent in the UK and elsewhere. PMIs, business surveys and other high frequency real-time indicators all point to it. In the UK consumers are tightening their purse strings as they brace for exorbitant energy bills. Forecasters can’t revise their inflation numbers fast enough to keep pace with wholesale gas prices! The size and shape of policy support takes on greater significance with each passing day.

Continue reading

Bad medicine is what we need…

We’re well known in this part of the world for bemoaning the weather. But in recent times, it’s prices that we have been lamenting in our chit-chat with neighbours and in the pub. And that’s not surprising given the vast increases in the cost of things like gas and electricity that we have seen. To put this in context, if beer prices had increased at the same rate as gas, we’d now be paying about £40 a pint in some establishments.

Continue reading