Flash comment archive

  • NI labour market data: Apr - Jun 2019

    NI labour market data: Apr - Jun 2019

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe, said:

    “Today’s data painted another relatively positive picture of the Northern Ireland labour market. The employment rate hit a record high and, despite increasing over the quarter, the unemployment rate remains low by historical standards and when compared with the overall UK unemployment rate.

    “Perhaps the most eye-catching news from these figures is that the economic inactivity rate fell to the lowest rate on record. High economic inactivity represents one of Northern Ireland’s long-term economic challenges so this fall is clearly to be welcomed. However, it’s important to note that the local economic inactivity rate is still considerably higher than the UK average and is the highest of the twelve regions of the UK. Reducing the rate of economic inactivity needs to remain a key objective of policymakers in Northern Ireland.

    “Looking forward, the threat of leaving the EU without a deal at the end of October remains the most significant risk facing the Northern Ireland economy. If we are to build on the recent strong performance of the labour market, then it’s vital that a no-deal Brexit is avoided.”

    This comment was published in response to the April – June 2019 Northern Ireland labour market data published by NISRA on 13 August 2019.


  • NI labour market data: Mar - May 2019

    NI labour market data: Mar - May 2019

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe, said:

    “Despite the subdued rate of economic growth and the high level of uncertainty, the Northern Ireland labour market continues to show its resilience.

    “From March-May 2019, the employment rate hit a series high and there was a welcome fall in the rate of economic inactivity. While there was a small rise in the unemployment rate compared with the previous quarter, it still remains well below its long-term average.

    “When compared against Northern Ireland’s historical labour market data, these latest figures paint a relatively positive picture. But when compared nationally – while the local unemployment rate is lower – Northern Ireland still lags behind the wider UK on some metrics. The local employment rate is the second lowest of the twelve regions of the UK and the inactivity rate is still considerably higher than the overall UK rate. The Northern Ireland labour market still has room for improvement but has recently been heading in the right direction.”  

    This comment was published in response to the March – May 2019 Northern Ireland labour market data published by NISRA on 16 July 2019.


  • UK inflation data: February 2019

    UK inflation data: February 2019

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “UK inflation increased slightly to 1.9 per cent in February, which was the first increase since last August. But, despite the rise, inflation remained below the Bank of England’s 2 per cent target for the second month in succession.

    “Looking beyond the headline figure and at the different categories of goods and services, the largest price rises were for alcohol and tobacco and in the communication category which includes postal services, mobile phones and internet subscriptions.

    “There were also quite strong price rises within the transport category, for example the price of new cars increased by 5 per cent over the year to February, and for recreational activities.

    “The one category in which prices fell over the year was clothing and footwear. This was the sixth consecutive month in which the price of clothes and shoes decreased.

    “The latest labour market data showed that wages for employees in Great Britain increased by 3.4 per cent over the year to November – January. So, despite the small rise in inflation, the rate of real wage growth remains firmly in positive territory, as it has been for some months now.”

    This comment was published in response to the February 2019 UK inflation data published by the ONS on 20 March 2019.

  • NI labour market data: Nov - Jan 2019

    NI labour market data: Nov - Jan 2019

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe, said:

    “Today’s data continues to reinforce the message that the Northern Ireland labour market is in relatively good shape. The employment rate increased over the quarter and the year to November – January and now sits at a record high. The increase over the year was broad based with increases observed in the employment rate for both men and women and across all age categories within the working age population. The fall in the economic inactivity rate shown in the data is also a welcome development.

    “In addition, the Quarterly Employment Survey data showed the number of jobs in the local economy is also at a record high with the number of jobs in the broad manufacturing, construction and services sectors all increasing at the end of last year.

    “While this is all positive news, we must recognise the fact that the future performance of the local labour market will be heavily dependent on how the Brexit process evolves in the coming days. A no-deal Brexit occurring on 29 March is very unlikely, though still technically possible. Avoiding a no-deal Brexit is a necessity for the local economy and for the individual businesses across Northern Ireland that are continuing to create jobs.”

    This comment was published in response to the November – January 2019 Northern Ireland labour market data and the Northern Ireland Quarterly Employment Survey for December 2018 published by NISRA on 19 March 2019.


  • UK inflation data: December 2018

    UK inflation data: December 2018

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “Inflation in the UK fell from 2.3 per cent in November 2018 to 2.1 per cent in December – the lowest rate since January 2017.

    “A large contributing factor to the fall in the headline inflation rate was a decline in the rate of price rises for petrol and diesel. The annual inflation rate for petrol fell from 7.6 per cent in November to 1.5 per cent in December, while the inflation rate for diesel decreased from 11.2 per cent to 6.7 per cent.

    “This fall in inflation is welcome news for consumers as it marks another step on the path back towards the Bank of England’s 2 per cent target. When coupled with recent strong data on wage growth, this decline in the rate of inflation offers further support to consumer spending power as it continues its gradual recovery. 

    “However, while this data can be viewed as positive news, it is important to recognise the high degree of uncertainty that currently exists around the Brexit process. The future paths of inflation, consumer confidence and household spending are all likely to be impacted by how the Brexit process unfolds in the weeks and months ahead.”

    This comment was published in response to the December 2018 UK inflation data published by the ONS on 16 January 2019.


  • UK inflation data: July 2018

    UK inflation data: July 2018

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “Inflation in the UK increased for the first time since last November, rising from 2.4 per cent in June to 2.5 per cent in July.

    “One of the factors behind this rise was higher oil prices. Consumers will have felt the impact of this via higher prices at the pumps. The annual inflation rate for diesel increased from 12.6 per cent in June to 13.8 per cent in July. For petrol, there was an increase from 11.1 per cent to 11.7 per cent.

    “Higher oil prices also had an impact on manufacturing businesses with the rate of input price inflation rising for the fifth consecutive month. The current rate of 10.9 per cent is significantly higher than the 3.9 per cent observed in February. This increase in costs could work its way through the supply chain and put some upward pressure on consumer prices, slowing the gradual move in CPI inflation back towards the Bank of England’s 2 per cent target.

    “With inflation still relatively high, consumers’ purchasing power remains under pressure and, as a result, increases in household spending over the next few quarters are likely to remain modest.” 

    This comment was published in response to the July 2018 UK inflation data published by the ONS on 15th August 2018.


  • NI labour market data: Apr - Jun 2018

    NI labour market data: Apr - Jun 2018

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “The Northern Ireland labour market softened slightly in April – June as the employment rate decreased and the unemployment rate rose from a record low in the previous quarter.

    “Despite the increase, the unemployment rate is still 1.5 percentage points lower than last year. The Northern Ireland unemployment rate has also been below the UK-wide rate for the last four quarters.

    “To really understand the performance of a labour market, it’s important to look at more than just the headline rate of unemployment. Northern Ireland still has the highest rate of economic inactivity across the twelve UK regions. The percentage of unemployed people who have been without a job for one year or more is 63.1 per cent in Northern Ireland, much higher than the 26.7 per cent observed for the whole UK.

    “The Northern Ireland labour market is in relatively good shape, but challenges such as these still need to be addressed.”

    This comment was published in response to the April – June 2018 Northern Ireland labour market data published by NISRA on 14th August 2018.


  • UK GDP data: 2018 Q2

    UK GDP data: 2018 Q2

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “The UK economy performed better in the second quarter of the year than it did in the first quarter, but we shouldn’t get too excited about this pickup in growth.

    “The quarterly rate of household spending growth remained relatively subdued as above-target inflation continued to exert some pressure on consumers’ spending power. And while business investment returned to positive growth after declining in the first quarter, Brexit-related uncertainty is still having a negative impact on businesses’ willingness to embark on new strategic investment projects.

    “Despite sterling remaining relatively weak, the data showed that exports fell sharply in the second quarter of the year and net trade made a negative contribution to GDP growth for the first time since 2016.

    “In short, the UK economy is still experiencing a period of positive, but modest, growth.”

    This comment was published in response to the UK GDP data released by the ONS on 10th August 2018.


  • UK interest rate announcement: August 2018

    UK interest rate announcement: August 2018

    Commenting on today’s announcement, Danske Bank Chief Economist Conor Lambe said:

    “As had been widely expected, the Bank of England’s Monetary Policy Committee (MPC) increased interest rates to 0.75 per cent today.

    “This marks the first time that interest rates in the UK have been higher than 0.5 per cent since March 2009.

    “However despite this rise, and the view that interest rates are unlikely to return to the levels they were at before the financial crisis anytime soon, monetary policy in the UK remains relatively supportive for most consumers and businesses.

    “The MPC continued to imply that future rises in interest rates are likely over the coming years. However, these increases are expected to occur only gradually.”

    This comment was published in response to the Monetary Policy Committee's UK interest rate announcement in August 2018. 


  • NI Composite Economic Index: 2018 Q1

    NI Composite Economic Index: 2018 Q1

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “Today’s data shows that economic output in Northern Ireland decreased in the first quarter of 2018 when compared with both the fourth quarter of last year and the first quarter of 2017.

    “Compared with the final quarter of 2017, services output increased at the start of this year. However, there was a decrease in output in the production sector and a particularly sharp fall in construction activity.

    “The overall decrease in output is likely to have been driven by a combination of factors. Despite beginning to recover gradually, household spending power remains under some pressure. Bad weather in the early part of the year is likely to have played a role, particularly in the fall in construction output. And the continued uncertainty around Brexit is dampening business investment.

    “Despite the fall in output estimated for the first quarter, the annual rate of economic growth in Northern Ireland for 2018 as a whole is expected to be positive. But with the challenges of constrained consumer spending power and Brexit-related uncertainty likely to persist, the performance of the local economy throughout this year is expected to be underwhelming.”     

    This comment was published in response to the 2018 Q1 Northern Ireland Composite Economic Index released by NISRA on 19th July 2018.


  • UK inflation data: June 2018

    UK inflation data: June 2018

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “Despite there being no change in the headline inflation rate of 2.4 per cent, there was a sharp rise in the transport component of the CPI inflation measure. The annual inflation rate relating to transport prices increased from 4.7 per cent in May to 5.5 per cent in June. This was mainly driven by increases in petrol and diesel prices.

    “The rate of price increases did slow for food and non-alcoholic drinks and for clothing and footwear.

    “There are currently two opposing forces influencing the inflation rate. The impact of the post-referendum sterling depreciation is gradually fading, which is exerting downward pressure on the inflation rate. However, there is upward pressure coming from higher oil prices.

    “That being the case, the numbers could fluctuate a little over the next few months but the annual rate of inflation for 2018 as a whole is expected to be lower than observed last year.”  

    This comment was published in response to the June 2018 UK inflation data published by the ONS on 18th July 2018.


  • NI labour market data: Mar - May 2018

    NI labour market data: Mar - May 2018

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “The latest Northern Ireland labour market data revealed some good news with the employment rate rising and the inactivity rate falling when compared with the previous quarter.

    “The male employment rate fell, but this was offset by a further rise in the female employment rate.

    “Looking across the different regions of the UK, Northern Ireland’s labour market sits near the ends of the spectrums. Despite being relatively high in a local context, Northern Ireland’s employment rate of 69.8 per cent is the lowest of the UK regions and the only rate to be below 70 per cent.

    “The local unemployment rate of 3.5 per cent is equal to that of the East and South East of England with only the South West enjoying a lower rate of unemployment (3.2 per cent) than these three regions.

    “But the long-standing challenge of high inactivity means that Northern Ireland’s economic inactivity rate remains the highest of all the UK regions.”

    This comment was published in response to the March – May 2018 Northern Ireland labour market data published by NISRA on 17th July 2018.


  • UK inflation data: April 2018

    UK inflation data: April 2018

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “UK inflation fell again in April. The CPI rate declined from 2.5 per cent in March to 2.4 per cent in April.

    “After last week’s labour market data revealed a rise in the rate of regular pay growth for employees in Great Britain, today’s fall in inflation is a further sign that the squeeze on UK consumers is gradually easing.

    “But inflation has further to fall before it returns to the Bank of England’s 2 per cent target rate and real wage growth, while back in positive territory, remains modest. The data is moving in the right direction for consumers, but the pressure on household budgets remains a constraining factor on the prospects for both the UK and Northern Ireland economies.”

    This comment was published in response to the April 2018 UK inflation data published by the ONS on 23rd May 2018.

     

     


  • UK inflation data: March 2018

    UK inflation data: March 2018

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “CPI inflation in the UK fell from 2.7 per cent in February to 2.5 per cent in March 2018.

    “This latest reading means that inflation is now at its lowest rate since March of last year and has fallen by 0.5 percentage points already in 2018.

    “For UK consumers, this fall in inflation is the second bit of good news in as many days as the latest labour market data showed a rise in the rate of wage growth. These two data releases reinforce the view that, going forward, the consumer squeeze is likely to ease gradually.

    “But we shouldn’t lose sight of the fact that inflation is still above the Bank of England’s target and wage growth remains below its pre-financial crisis average. Consumers are unlikely to loosen their purse strings too much over the next couple of months.”

    This comment was published in response to the March 2018 UK inflation data published by the ONS on 18th April 2018.


  • NI labour market data: Dec - Feb 2018

    NI labour market data: Dec - Feb 2018

    Commenting on the latest figures, Danske Bank Chief Economist Conor Lambe said:

    “The latest Northern Ireland labour market data contained some positive signs. The employment rate increased over the quarter and over the year while the unemployment rate fell.

    “At 27.9 per cent, the economic inactivity rate is still too high and above what it was a year ago. It did decrease over the quarter which is encouraging to see, but there is still substantial room for improvement on this particular measure of the local labour market.

    “In Great Britain, wages increased by 2.8 per cent over the year to December – February 2018 – above the current rate of inflation. With real wage growth now back in positive territory, it seems likely that the Bank of England’s Monetary Policy Committee will go ahead and increase interest rates at their next meeting on 10th May.”

    This comment was published in response to the December – February 2018 Northern Ireland labour market data published by NISRA, and the UK labour market data published by the ONS, on 17th April 2018.


  • One year to Brexit

    One year to Brexit

    Commenting on it being only one year until the UK leaves the EU, Danske Bank Chief Economist Conor Lambe said:

    “It is now just one year until the United Kingdom leaves the European Union and, despite the progress that has been made to date, there is a significant amount of work still to do before Britain is Brexit-ready.

    “There is still no agreed solution on how a hard border will be avoided between Northern Ireland and the Republic of Ireland. With maintaining membership of the EU customs union – which would have gone part of the way to solving the problem – ruled out by the UK Government, other solutions will need to be identified. Most of the focus of the discussions related to Northern Ireland that will take place over the coming weeks is likely to be placed on the ‘backstop’ option. This could see Northern Ireland maintain very close links to the EU in the absence of an alternative way to avoid a hard border. But the UK Government is hopeful that it will find a solution to the border challenge during the detailed trade talks and that the ‘backstop’ won’t be needed.

    “The future trade deal is arguably the most important aspect of this negotiation. But there will not be enough time between now and the autumn, when the withdrawal treaty needs to be agreed, to finalise a full and comprehensive free trade agreement. Therefore, the discussions will have to continue during the transition period. Based on the time taken to conclude past trade deals, even with the additional 21 months that the transition period provides, the timeline is still very tight. And that’s not including the time that may be needed for the Government and businesses to have the processes in place to ensure they are ready for the agreement coming into force.

    “With a year left to run until Brexit day, the chances of a no deal scenario coming to fruition in 12 months are now less than they were just a few months ago. But unfortunately, they are not yet zero.

    “Businesses are still facing a cloud of uncertainty when it comes to their future long-term access to EU markets. While the progress made recently is welcome, the UK Government must keep up the pace in the negotiations. There is no time to lose.”