Uncertainty hurts North’s economy
Political uncertainty and the absence of a Northern Ireland Executive has sent consumer confidence levels plummeting again in the North, according to new research.
The latest Danske Bank Northern Ireland Consumer Confidence Index shows people were less happy about their financial situation in the last quarter than they were 12 months earlier.
The index also illustrates that people may be less inclined to spend on “high value” items such as furniture or holidays in the coming year compared with their recent spending patterns and that the majority of households do not expect their financial position to improve over the next year.
As a result many expect they would be unable to save as much as they did previously.
Conor Lambe, Danske Bank economist said the survey shows that although many consumers said they were feeling the impact of persistent high inflation this year, the biggest negative impact was directly linked to the ongoing political uncertainty in the North.
Mr Lambe added: “Unsurprisingly, some consumers said that Brexit was having a negative impact on their confidence levels, while others said it was affecting them positively.
“Of the factors having a positive impact on confidence levels, 22 per cent of people mentioned low interest rates. Many people, particularly those with variable rate borrowings, will be watching future monetary policy announcements closely as the Bank of England’s Monetary Policy Committee looks set to raise interest rates relatively soon.”
According to Danske Bank a significant percentage of residents of Northern Ireland – particularly part-time workers, homemakers, retired people and unemployed people – believe their financial position has deteriorated over the past year.
In contrast, however, people with full-time jobs or students believe they are better off than they were a year ago. According to Danske Bank the over-65s are among the least optimistic, but Northern Ireland’s younger population appears to be the most confident about their future finances: 27 per cent of 16- to 24-year-olds and 26 per cent of 25- to 34-year-olds expect their finances to improve .