Will it? Won’t it? On Friday we learned that, after delivering a strong first quarter performance, UK GDP contracted by 0.2% in the three months to June. This marks the first outright decline in economic activity since 2012 and puts the UK uncomfortably close to ‘technical recession’ territory just as global growth is faltering.
Last week was the largest weekly fall in sterling in seven years. Sterling has been this year’s worst performing major currency against the dollar. The pound dipped below $1.40 for the first time since 2009 and hit a low of $1.3836. So far this year sterling has fallen by over 6% against the dollar and is down almost 13% relative to its high last June ($1.593). A number of factors have been weighing on sterling sentiment in recent weeks. These include: market concerns over the scale of the UK’s current account deficit and financial markets pushing back their expectations of when the Bank of England will begin hiking interest rates. Meanwhile the forthcoming EU referendum on the 23rd June is also a source of political risk and financial market volatility.
1. Ulster Bank NI PMI
The Ulster Bank Northern Ireland PMI was released on Tuesday. It showed that output growth at NI private sector firms was maintained in June, as new orders rose at an accelerated rate. Increased new business led to a build-up of outstanding work, but the rate of job creation eased. Meanwhile, cost inflation moderated and companies raised their output prices for the first time in ten months.
Today sees the release of June data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by Markit – indicated that output growth was maintained as new orders rose at an accelerated rate. Increased new business led to a build-up of outstanding work, but the rate of job creation eased. Meanwhile, cost inflation moderated and companies raised their output prices for the first time in ten months.
There was a time when most sectors of the Northern Ireland economy looked on with envy at the environment in which the local agri-food sector was operating. The likes of heavy manufacturers were being hit by plummeting demand and soaring input costs, whilst the agri-food sector was by comparison basking in positively glorious conditions. Demand was strong and the weakness of sterling against the Euro afforded an envious competitive advantage against food and drink firms based in the Eurozone. The result was that whilst all of the key indicators for the economy in general were pointing downwards, the key indicators for the agri-food sector were very much on the up.
That was then; this is now.
Richard Ramsey delivered a presentation to members of the Guild of Agricultural Journalists and other members of the media this morning on the Northern Ireland agri-food sector and the economic context in which it is operating. You can view his slides here:
This is an extended version of an article that appears in the Belfast Telegraph Business Month published 2nd March 2015
The Ukraine crisis has just celebrated its first anniversary. With Crimea already annexed and back under Russian control, a surreptitious war in Eastern Ukraine with Russian-backed rebels rumbles on. Western powers have responded to Russian aggression by imposing economic sanctions which include banning exports to, and imports from, Russia. Economic sanctions can be viewed as the most extreme form of a trade war and are often just one step away from outright military action.
