It has long been known that due to affordability challenges, young people have turned to their parents for money to help fund a deposit to buy their first home. But recent figures suggest that the ‘Bank of Mum and Dad’ (BOMAD) may be running out of cash. Bloomberg’s research suggests that while many first-time buyers are still relying on their parents, more and more are turning to their siblings instead. So what does the rise of BOBAS (the Bank of Bro and Sis) tell us about the housing market?
It could be said that the global economy at present is characterised by ‘financial hangxiety’. Anyone who has been to a late spring / early summer barbecue and suffered from the after-effects of beer, wine or aperol spritz the next morning, and the dread of the working week that lies ahead, will probably know what hangxiety is. With the financial version, consumers are experiencing the effects of rising food and utility bills and resulting nervousness about the state of their household finances going forward. This is particularly true for those mortgage holders due to see a surge in their mortgage payments in the coming months and years.
Over recent weeks, the UK has been battered by Dudley, Eunice and Franklin. ‘G’ will be Gladys and we await to hear the ‘H’ name of the subsequent storm that follows. Metaphorically, we are already aware of the advancing ‘T’ storm, or Tax storm. April will see us showered with more tax increases most notably the hike in National Insurance Contributions.
It used to be that people would do anything for a job. Today, it’s more like – to paraphrase the title of the late Meatloaf’s iconic song – ‘I would do anything for a job, but I won’t do that’.
Companies, particularly in certain sectors, are struggling badly to access the skills they need. This is perhaps most acute in sectors such as healthcare and food processing because job hunters are taking advantage of the jobs market being a seller’s market. They can afford to be more choosey about the work they undertake in a way they couldn’t in the past. Many are therefore opting for other industries where the salaries are perhaps higher, and conditions perceived to be less challenging.
The annual pace of UK CPI inflation accelerated from 5.1% in November to 5.4% in December representing the highest rate since March 1992 (+7.1% y/y). UK inflation had peaked at 8.4% in April and June of 1991. Consumer goods inflation (+6.9% y/y) is running at twice the rate of consumer services inflation and is at its highest rate since July 1991 (+7.0% y/y). Goods inflation is expected to breach its record high of 7.4% y/y (Sep/Oct-90) in the coming weeks. Consumer services inflation (+3.4% y/y) remains more subdued by comparison and is at an eight-and-a-half-year high. By comparison, consumer services inflation was running into double-digits in late-1990 and 1991 and peaked at 12.1% in April 1991. Services inflation will be closely watched in the coming months as the strength of pay settlements will feed into this measure. Wage increases will also filter through into the cost of consumer goods.
Given what has happened to the economy over the last two years, Northern Ireland’s headline labour market statistics are a veritable winter wonderland. Unemployment is at 3.1% – one of its lowest readings on record. Meanwhile the number of employees on Northern Ireland’s payrolls hit another record high in December and almost 20,000 above March 2020’s pre-pandemic high. Indeed, no other UK region has witnessed a stronger rebound in payrolls growth. It is a similar story with median earnings growth over the last two years.
As far as economic output is concerned, 2020 has been a year of extremes. Record rates of decline in Q2 followed by record rates of expansion in Q3. Lockdown restrictions have had the effect of turning economic activity off and on. However, as the pandemic has progressed, subsequent lockdowns have been less severe on economic activity than the first. Many businesses have been able to adapt and function throughout lockdowns or pivot into new markets. The trajectory of economic output has largely followed a bungee jump. The initial fall and rebound will be the most extreme, but subsequent declines and rebounds will moderate. Not surprisingly, the latest Industrial Production and Index of Services (private sector only) from NISRA revealed further declines in output in Q4 2020. These two indices account for the vast majority of Northern Ireland’s Composite Economic Index. Given the scale of the declines revealed today, it is inevitable that the Composite Economic Index (a proxy for GDP), when published next month, will post a sizeable contraction.
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You could say that the less said about 2020 the better. But even when we look forward to 2021, in some respects, it’s 2020 all over again. This time last year, we were looking forward to the Olympics and Euro 2020. Once again this year, we’re looking forward to the Olympics and the Euro 2020. But that said, in 2021 there are going to be a whole series of new trends that impact upon economies, countries and businesses. So, what are they?
Continue readingIt is that time of year when you are shopping for nephews and nieces. Gamble with a gift you are not sure they will like? Or play it safe with a voucher? What type of voucher – specific or generic? Or instead just plump for cash – the most flexible store of value there is. After all Cash is King!
For decades, the most important basic skills taught in schools were the Three “Rs” – reading , (w)riting and ‘rithmetic. In recent decades, becoming ICT literate has been added to these functional skills of literacy and numeracy. While the texting and Xbox generation have become adept at embracing technology, more so than older generations, the same is not necessarily true for literacy and numeracy. Too many of our young people leave school without mastering these basic skills. This leaves them ill equipped for the world of work and dealing with life in general. Are we doing enough to address this? Every August (bar the one just passed) social media is awash with stories on results day. Best grades ever etc. You would be forgiven for thinking we had a world class education system. That holds true for some but it is a lousy system for a significant number of others. Northern Ireland society’s fixation with school league tables breeds a one-dimensional view of educational performance. Meanwhile, Northern Ireland continues to churn out a higher proportion of school leavers without any qualifications than any other UK region. This fact receives little airtime but we can’t sweep it under the carpet. We have an unusually high tolerance threshold for this failure in our education system. This is surprising when you consider the cost associated with the social problems that flow from these sub-optimal education outcomes.
