All eyes today on the new chancellor. Since taking office last Friday, Jeremy Hunt is sparing no time in pacifying panic-stricken markets by undoing much of the controversial tax measures announced by his predecessor. This has already borne fruit—gilts and sterling rallied this morning. But this won’t completely fill the gap in public finances. Besides, the deteriorating growth outlook, continued real income squeeze and higher mortgage rates will weigh on the economy through next year.Continue reading
Bank of England governor Andrew Bailey’s trip to the US for the annual IMF and World Bank meetings will not shield him from worries back home. The BoE is caught in the crossfire between raising rates to tame inflation and concerns that much higher mortgage rates would push the UK into a sharp downturn. Against this backdrop, every word Bailey and his colleagues utter will be closely scrutinised.Continue reading
Today sees the release of September data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – saw the third quarter of 2022 end with the Northern Ireland private sector remaining deep inside contraction territory. Rates of decline in output and new orders quickened and while employment continued to rise the latest round of job creation was only marginal.Continue reading
To say that September has been a dramatic month in politics is an understatement. It marked the end of an era in so many ways. Queen Elizabeth II’s 70-year reign has come to an end with the longest serving monarch of all-time replaced by King Charles III.
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If Craig David was to put last week’s frenetic financial market activity to music, it would go something like this:
The pound slumped on a Monday
Took flak from the IMF on Tuesday
We saw BoE buying Gilts again on Wednesday
And on Thursday and Friday and Saturday
We chilled for a 45p tax U-turn on Sunday
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 Andrew Webb, Chief Economist at Grant ThorntonContinue reading
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
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”.
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Last week saw an avalanche of data releases. A mixed picture indeed. On the one hand, GDP growth petered out and other activity indicators deteriorated. On the other, inflation eased a notch, whilst the labour market remains tight. How will the Bank of England react? We shall find out this week!Continue reading
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