Chief Economist’s Weekly Brief – Brexit breakthrough?

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. 

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Sharpest fall in output since November 2012

Today sees the release of September data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – indicated that the Northern Ireland private sector moved deeper into contraction, as Brexit uncertainty impacted negatively on firms’ operations. Output, new orders and employment all fell at sharper rates, while business sentiment dropped to a new record low.

OCT19 PMI Infographic D1

 

 

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Chief Economist’s Weekly Brief – The border issue

It has proved difficult to replace the “infamous” Irish border backstop. It is still unclear if the PM has enough time and creativity to secure a deal before the mid-October deadline. After a historical ruling by the WTO the US has announced import tariffs on $7.5 billion of imports from the EU, effective October 18th.

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Chief Economist’s Weekly Brief – Institutions fight back

The UK Supreme Court ruled unanimously that proroguing of the Parliament was unlawful. The Parliamentary session has resumed, but there is little clarity on Brexit’s form, date or on the timing of a general election. In the US the House of Representatives has started an impeachment inquiry. At the UN Climate Summit 66 countries, 93 companies and more than 100 cities announced commitments to reach net-zero emissions by 2050.

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Chief Economist’s Weekly Brief – Oil shock

Attacks on two oil facilities in Saudi Arabia led to a 6% reduction in global oil supply and a 15% oil price spike within days. Saudi Arabian assurances that oil production levels will return to normal within weeks have been greeted sceptically. Meanwhile the Federal Reserve lowered the Fed Funds Rate by 25 basis points following a round of monetary easing by the ECB. Bank of England decided to save its firepower for later.

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Chief Economist’s Weekly Brief – Draghi’s last push

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.

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Chief Economist’s Weekly Brief – Clouds are gathering

Over the last week the government’s working majority was reduced from plus 1 to minus 45. There is still no clarity on the Brexit outcome or the timing of a general election. All of this against the backdrop of a global manufacturing slow down – the UK, Germany, the USA and China all have recorded weakness in manufacturing activity. At least, America and China have agreed to resume trade talk in early October.

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Output down for sixth month running in August

Today sees the release of August data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – suggested that Brexit and associated economic uncertainty led to ongoing declines in the Northern Ireland private sector during August. Marked reductions in output and new orders were recorded, while business confidence hit a new low and job shedding intensified. 

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