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.
They say a week is a long time in politics and it can also be a long time in economics. Over the past seven days, we’ve had a wave of data released that tells us much about what happened in the third quarter of the year and how the local economy is currently performing.
The UK Government and the European negotiating team have reached a new deal. Despite this the Prime Minister had to send a three-month extension request to the EU. However, there is still a chance that the deal will be passed into law before the 31st of October. With 11 days to go all options (deal, no deal, extension) are still on the table.
Encouraging discussions between UK PM Johnson and Irish president Varadkar fuelled optimism of a Brexit resolution. However, the thorny issue of the Irish border remains a major stumbling block. Time is running out for a deal at October’s EU summit. Meanwhile, a “partial” US/China trade deal has been agreed but hurdles remain.
Last week started with the prorogation of the UK Parliament, the legality of which will be decided by the Supreme Court this week. Despite the political storm, it looks like the UK economy managed to stave off a recession. A series of significant new monetary easing measures were announced by the outgoing ECB President Draghi.
UK workers received a Christmas bonus with the highest wage growth for a decade reported last week. The labour market is yet again the star performer in an economy that is otherwise losing a little momentum.
What were the economic highlights and lowlights of 2018? What will be good, bad and ugly in 2019? Who will be next year’s economic villain? What word would you use to sum up what you expect to see in the next 12 months? These and many other questions about the Northern Ireland and global economies are asked and discussed in our new podcast, which we’ve boldly called the Big Economic Quiz of the Year.
And fittingly, we have some big fish from the local economics community contributing. Angela McGowan, Director of the CBI in Northern Ireland and Richard Johnston, Deputy Director of the Ulster University Economic Policy Centre join our own Richard Ramsey and business journalist Jamie Delargy to review, predict and ruminate.
The squeeze on living standards hasn’t gone away
In recent months an emerging narrative has been that the squeeze on UK living standards has relaxed or even ended. This refers to the pace of annual earnings growth overtaking inflation. However, real earnings growth remains modest at best. Meanwhile the squeeze continues for public sector workers on pay caps (1% p.a.) and households experiencing a multi-year freeze on working-age welfare benefits (until 2020). In light of the fact that the price of necessities including utility bills, motoring costs, rates bills and private sector rents (for Northern Ireland) are all rising at substantial rates and above the headline rate of inflation, it is premature to talk of a meaningful end to the cost of living squeeze. Continue reading
Not only has the poor weather prolonged winter and darkened our moods, it also looks to have taken a fair slice off economic growth in the first quarter. With luck it’s just a blip.
We’re just over a month-and-a-half into 2018, and planes have been dominating the economic news agenda this year so far.
On the one hand, we’ve had the trade dispute between Boeing and Bombardier come to a head, following weeks and indeed months of hand-wringing about the potential impact of any tariffs on the Canadian firm’s Belfast operations. On the other hand, we’ve had another stream of good news on the tourism front, as more and more overseas visitors flock to Belfast and Northern Ireland.