Chief Economist’s Weekly Briefing – Bumper year?

As the report card on opening up improves, so does the growth estimate for 2021. The latest to join the bandwagon is the Bank of England which is now forecasting the UK economy to enjoy the fastest growth since the Second World War. That will pull the Northern Ireland economy up too. The Chancellor also expects the recovery to be ‘turbo-charged’ by the excess savings of households and firms.

The Bank of England, City of London, UK, at night
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Chief Economist’s Weekly Briefing – Stimulus windfall delivers

The US economy bounced back sharply in Q1 thanks to a successful vaccination drive and in particular generous government support. The latter meant personal income in the US posted its biggest ever increase in March (a series that goes back to the 1940s!). That’s what you call shock therapy for the recovery. And Northern Ireland’s non-essential retail finally reopened its doors which coincided with news that every adult over the age of 18 will receive a £100 High Street voucher later this year.  

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Chief Economist’s Weekly Briefing – Here comes the sun

Another steady dose of upbeat economic data this past week. Starting with confirmation the UK recovery got underway back in February, despite lockdown restrictions, to increased restaurant reservations, job adverts and even traffic on the roads! Locally, hairdressers, beauty salons and non-essential retail are set to reopen this week with gyms and pubs with beer gardens following on 30th April. But there are clouds elsewhere. The world crossed 140 million COVID cases in the past week.

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Chief Economist’s Weekly Briefing – Spring healing

The onset of Spring is a reminder of renewal and growth. And so the world economy continues to heal. That positivity is reflected in the latest economic data as well as IMF’s latest outlook, which points to higher growth and less long-term damage than previously expected. Similarly, the 12-month outlook amongst Northern Ireland firms is at a 13-month high. But what confidence there is could be dented by the current political situation and negative news headlines.

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Chief Economist’s Weekly Briefing – Blocked

Encouraging signs of an economic recovery in the US, EZ and the UK were upstaged by a boat stuck in a canal.  Pre-COVID, the phrase “a lorry has broken down on the Westlink” struck fear into Belfast’s rush hour commuters. Imagine that lorry blocking traffic for days or even weeks. Then scale that up to the global Westlink that is the Suez canal.

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Chief Economist’s Weekly Briefing – One year on…

…from the first lockdown last spring we continue to find ourselves under partial lockdown. Have we frozen in time? The answer is emphatically not. Reports on the recovery gathering pace continues to flow in, with job adverts the latest to show a marked improvement. Locally, some manufacturing sectors (e.g. pharma) are posting record levels of output. But some of us are not so lucky. Italy has entered lockdown, again!

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Chief Economist’s Weekly Briefing – Stormont signs fiscal galacticos

The Department of Finance rarely turns heads. But last week it sent fiscal geeks delirious. While news of extended business rates relief was expected. The surprise was the unveiling of Sir Robert Chote, the former chair of the UK’s OBR, to head up NI’s new Fiscal Council. Effectively an NI OBR. In fiscal terms this is like Glentoran signing Lionel Messi. The second big signing was the IFS’s Paul Johnson to chair the Fiscal Commission looking at what further fiscal powers could be devolved to Stormont. Chapeau!

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Chief Economist’s Weekly Briefing – A shot in the arm

Chancellor Sunak set out what will (hopefully) be the final phase of the extraordinary support in response to the pandemic. A host of support measures were announced, amounting to a whopping £65bn (around 3% of GDP) worth of spending. Looks like the UK economy is now even better positioned to bridge the gap to recovery. But there was a strong steer on the public finance repair job to come. 

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Chief Economist’s Weekly Briefing – Exit strategies

The lockdown exit roadmap has been set, cautiously but (hopefully) irreversibly. And come March 3, the Chancellor will table the Budget, outlining the future of the government support schemes which have been so effective in preventing a wider economic fallout. But charting a course out from the extraordinary levels of government spending will be challenging. While markets have awoken to such spending levels igniting inflation down the road.

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