Coronavirus has now spread to 104 countries. The Italian government took exceptional measures to put in quarantine 16 million people living in 14 provinces in North Italy, it also announced restrictive measures covering the whole country. The Fed made an emergency 50bp rate cut, but this failed to put a floor under the falling stock market. Oil prices have plunged following OPEC’s failure to cut output, resulting in a price war between Russia and Saudi Arabia.Continue reading
COVID-19 is now in 69 countries and the hopes that it will be mainly contained within China are gone. After a large increase in reported cases in Italy and Iran, the stock market experienced the worst week since the financial crisis. Yields on ten-year Treasury bonds (viewed as a safe asset) reached all-time low of 1.13%.Continue reading
The new UK points-based migration system was revealed last week. It sets the same rules for immigrants from all countries and will take effect on January 1st 2021. These rules will make it harder for sectors relying on low paid workers to fill the jobs. Northern Ireland has the highest concentration of these jobs within the UK (>1 in 5). The hope is that this will lead to higher productivity due to investment in education and automation. With a record low unemployment rate, the adjustment period is likely to cause some disruption.Continue reading
Name the UK chancellor not to deliver a Budget? Sounds like a Trivial Pursuit question. Sajid Javid may be the first one in 50 years but he is not the only one. Javid’s six-and-a-half months in power did not see him deliver a fiscal set-piece. But he still fared better than Iain Macleod who took ill and died within a month of becoming Chancellor in 1970. Expectations have been raised for the new occupant of 11 Downing Street to embark on a fiscal stimulus. The economy certainly needs a boost.Continue reading
Parallels are being drawn between the coronavirus and the SARS outbreak in 2003. But the contours of the world economy have shifted over the past 17 years. China is 17% of global GDP. It was a mere 4% back then. So shuttered business, foregone spending and leisure trips, not to mention the supply-chain disruptions matter much more for the global economy.Continue reading
The UK has left the European Union. The transition period, during which the UK remains in both the single market and customs union, lasts until the end of the year, with trade negotiations set to start in March. In the background, the Bank of England kept Bank Rate unchanged, but lowered its forecast for the 2019 UK economy to 0.75%.Continue reading
2019 was characterised by political deadlock, not least with Brexit uncertainty and Stormont inaction. But a week can be a long time in politics. Two buses came at once, with the EU Withdrawal Agreement Bill passing its third reading in the Commons and Stormont resurrected after its three-year hiatus. The local private sector ended the decade on a low but politics has begun the 2020s on a high. Let’s hope this newfound optimism lasts and can translate to the economy.
2019 was a year of heightened uncertainty. It was coming from the Brexit delays and negotiations, new resurgence in the trade wars and worsening global economic outlook. Locally, Northern Ireland notched up another year of Stormont in ‘cold storage’. 2020 has a busy brief locally, nationally and globally.
In contrast with weakness in the Eurozone the US labour market is still in rude health. November employment gains surpassed expectations by a wide margin, despite global trade and economic uncertainty. This will provide relief to the Fed, which has signalled it will pause before it provides any more stimulus to the economy.