Chief Economist’s Weekly Briefing – Gently does it

pound-414418_1280 (3).jpgDebt looms large not just in the UK but across major economies. So rate hikes have to proceed very gently.

The producers. A decent August for UK production as output rose by 0.2% on the month. If it manages the same in September then production should rise by 0.9% in Q3, about treble its recent pace. Manufacturing is enjoying a mini-renaissance. Output rose 0.4% on the month and turnover is up 6% on the year. It’s an equal opportunity buoyancy too, benefiting common-or garden manufacturers as well as the high-end techie stuff. What’s not to like? Continue reading

Putting the economy first again

Brexit.pngThe tectonic plates of the established global trading system are moving. BRUMP – the Brexit vote and the Trump presidency – have created two fault lines – one in North America and the other in Europe.

2016 therefore looks to have been the peak for trade liberalisation. Moves to create a Trans-Pacific Partnership (TPP) trade deal and a European equivalent – the Transatlantic Trade and Investment Partnership (TTIP) – have already been scuppered by the current US President. These initiatives, years in development, were cancelled with a stroke of a pen earlier this year. Meanwhile Trump’s administration is also seeking to dismantle the North American Free Trade Association (NAFTA). Continue reading

Chief Economist’s Weekly Briefing – On the horizon

retail-1424043_1280.jpgYou can’t keep the UK shopper down. The retail sales figures for August are testament to that. Is a hike in interest rates on the way to cool things off?

Boom! UK shoppers hit the shops with gusto in August. The amount spent grew by 1.0%m/m and 5.6%y/y. The volume purchased, which adjusts the amount spent for inflation, rose 1.0%m/m and 2.4%y/y. Rising employment means more people are earning but that can’t account for retail sales growth. Either we dipped into our savings or we borrowed more. The Monetary Policy Committee will have noticed the rise in inflation to 3.2%. That will strengthen the hand of members who believe that the time for a rise in Bank Rate is coming closer. Continue reading

Farming exchanges bad times for good, but what lies ahead?

tractor-1815232_1280.jpgLast year was a year of many surprises – Brexit, Trump, Leicester winning the English Premier League, and Ireland beating the All-Blacks in rugby are just some examples that come to mind. The Northern Ireland economy also enjoyed an unexpectedly positive year in 2016, with many record-breaking performances, including in the labour market. But the turnaround in the fortunes of the agriculture sector is perhaps even more startling. Continue reading

Housing recovery, but legacy of boom lives on

key-979593_1280.jpgAs we approach the 10th anniversary of Northern Ireland’s house price peak (and subsequent correction), we’ve been seeing some encouraging signs in the housing market across a range of indicators. Despite the ongoing recovery over the last few years, though, it is fair to say that this does not mean we are ‘recovered’.  Indeed, ‘a recovery’ in house prices / house building back to the freak peaks of 2006/2007 is neither expected nor viewed as desirable. Continue reading

Economic Gongs: Best and worst performers in an ongoing drama

It had everything. There was intrigue, espionage, breakups, non-stop drama, and no end of fiction and fantasy. But whether you regard last year as the prelude to an economic horror, or something from an altogether more uplifting genre, what is clear is that 2016 was an epic, with significant implications for the local, national, and global economies. So with the annual Academy Awards having just been handed out, we’ve decided to suggest some potential winners of a hypothetical Economic Gongs. Here are the economies, personalities and organisations we think should be in contention for a range of bespoke categories.

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Chief Economist’s Weekly Briefing – Hard earned

crowd-71255_1280We’re breaking records for the number of people in work, yet more productive jobs are what we really need.

Record breakers. 2016 ended with
the UK’s highest share of people working since we started counting it in the 1970s. At 74.6% the working age employment rate hit a new record and the number in work reached 30.6 million. Continue reading

Three-in-a-row: NI notches up its 3rd year of house price growth

5474802142_e51c292c1b_bThis year will mark the tenth anniversary of Northern Ireland’s house price peak which heralded the start of a sustained period of collateral damage for the wider economy and not just the housing market. Residential property prices peaked in Q3 2007 and subsequently troughed in Q1 2013, down a whopping 57% some 5½ years later. Since then the housing market has been in recovery mode with three successive years of house price growth. For many homeowners the last ten years has represented a lost decade with aspirations blighted by negative equity. However, the combination of house price growth and time (assuming repayments) has seen the incidence of negative equity recede.

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Chief Economist’s Weekly Briefing – Aim high

aim-high-skyscraperPresident Trump has promised to unveil a spectacular reform of the US tax system in the next few weeks to boost the economy. Meanwhile the labour market has been producing spectacular results itself.

Ambitious. The number of Americans in work rose by 227,000 in January and the unemployment rate held steady at 4.8%. During President Obama’s second term employment increased by 12 million (8%), impressive alongside the UK’s still-respectable 3%. President Trump aims to add 25 million jobs over a decade. That’s very ambitious indeed but there are historical precedents: both the Reagan and Clinton administrations saw rates of job growth that, if repeated, would see the target being met. But they both arrived at the White House towards the end of recessions, Trump’s task is harder.

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