UK inflation rose to 5.2% in September, up from 4.5% in August.
China’s inflation rate has risen to 6.1%, having averaged 4.25% in recent years.
United States’ inflation rose to 3.9% in September, up from 3.8% in August.
Heating fuel costs have risen 49% since the onset of the financial crisis in August 2007.
UK unemployment rose to 8.1% in the three months to August – the highest rate for 15 years.
Consumer confidence, as measured by the Nationwide Building Society, has fallen for four successive months and is near its all-time low – recorded in February of this year.
Construction sector output in Northern Ireland fell by 7.0% in second quarter of this year against the first quarter, and by 14.4% on the same period last year. It is now almost 50% below peak activity, recorded in early 2007.
NI homes amongst cheapest in UK
House prices in Northern Ireland are amongst the cheapest in the UK, according to the latest Halifax UK price index report. Both Londonderry and Craigavon are in the top ten of affordable average property prices.
Homes in Derry cost an average of £868 per square metre and those in Craigavon are £870 per square metre. All the other ten cheapest locations are deprived areas of Northern England or Wales that have suffered from extreme industrial decline.
Northern Ireland has a clear lead in the top ten of places where property prices have appreciated least over the last decade. Belfast is first, Lisburn second and Bangor fourth. The table ignores the interim price inflation and subsequent crash. Following the boom and bust in the property sector, Belfast average home values are today just 25% more than they were ten years ago: by contrast they have risen by 160% in Peterhead, near Aberdeen.
Ballymena and Craigavon also feature in another of the Halifax top ten lists – with the largest average property sizes.
4,000 public sectors jobs go
Four thousand public sector jobs have been lost in Northern Ireland over the last year, according to analysis from accountancy firm PwC. The public sector has cut jobs more quickly and more deeply than was expected, says PwC – but it warns that the full pain of job losses has yet to be felt in Northern Ireland.
Across the UK, 240,000 fewer people worked in the public sector in the second quarter of this year, compared to the same period last year. There have been large employment losses in English local government, central government, particularly in the defence and education sectors, and in public corporations, including the BBC and the Post Office.
Many more jobs have been lost in the public sector over the last year than have been created in the private sector. Where there has been private sector job creation, this has focused on part-time rather than full-time posts, says PwC. However, if the analysis is spread over a longer period – from December 2009 to June this year – the picture is very different. Over that period, 290,000 public sector jobs were lost, while 600,000 private sectors jobs were created.
In Northern Ireland, the public sector staffing reduction represents 1.8% of those employed a year ago. PwC expects the rate of job losses here to accelerate over the next year. The firm warns that with little economic growth coming through, there is a significant chance of a double dip recession.
Dr Esmond Birnie, PwC’s chief economist in Northern Ireland, explained: “In percentage terms, Northern Ireland has experienced the lowest level of public sector job losses amongst the 12 UK regions, well below the North East and South West of England where the percentage fall has been between 5 to 6%.”
Creative industries prove important
The creative industries are worth over £700m a year to the Northern Ireland economy, according to statistics produced by the Department of Culture, Arts and Leisure. In 2008, the gross value added from the creative industries sector was £737m, equal to 4.2% of regional economic output.
Some 31,000 people in Northern Ireland are employed in 2,200 creative industries’ businesses, says the report. This is equivalent to 4.1% of jobs and 3.2% of businesses.
Minister Carál Ní Chuilín said: “The creative industries are recognised across the world for their potential for job and wealth creation. The sector can help to rebuild and rebalance our economy by stimulating the innovation, R&D and creativity needed to drive export focused growth.”
According to the Northern Ireland Science Park, an additional 25,000 jobs could be produced by exploiting opportunities in the knowledge economy sector, which could generate an additional £3bn a year to our economic output.
Invest NI to launch small firms loan scheme
Invest NI is seeking approval to launch a £50m loan fund for small and medium enterprises. The scheme has to be approved by the Financial Services Authority before it can go live – which is hoped will happen by early next year.
The agency wants to address a growing problem of SMEs’ difficulties in accessing funds. Figures produced by the Department of Enterprise, Trade and Investment found that SME success rates in applying for a bank loan have fallen dramatically in the last four years – from 92% in 2007, to 65% in 2010. The decline has been steeper than in the UK as a whole, with SMEs in Northern Ireland having had more success in 2007 than was the case with the GB counterparts.
For micro-business, access to bank lending has collapsed to an even worse extent. Firms with less than 10 employees now have only a 45% chance of getting a bank loan, compared with an 89% probability in 2007.
Invest NI’s initiative to address the crisis was welcomed by the Federation of Small Businesses. John Friel, FSB Regional Chairman, responded: “Access to capital remains a key concern for many of our members. These funds will hopefully help to address this issue directly, and will indirectly also serve to increase the pressure on our banks to start lending again. It is vital that small business owners gain access to the finance they need to help their businesses grow and revitalise the economy.
“However, the introduction of this loan facility should be only seen as the first step in a bespoke package of measures aimed at improving economic conditions that will ensure doing business in Northern Ireland is a much more attractive prospect for existing indigenous firms and prospective overseas investors.”
The move by Invest NI follows its admission that it must return £17m to the Northern Ireland Executive because it was unable to spend all its funds for supporting inward investment. It is unclear whether Invest NI will be permitted to continue providing grant assistance to inward investors beyond early 2013, because of a change in European Union rules.
Invest NI declined to comment on the small firms loan scheme until it is approved by the FSA and failed to respond to a request for a comment on its underspend.
BT upgrades North West telecoms
Londonderry is the first place in the UK or Ireland to have a rolled-out high speed broadband infrastructure, BT has announced. The roll-out is part of BT’s commitment to Derry’s status as City of Culture 2013 and supports the Digital Derry initiative, intended to establish the city as the best place in the island to establish a digital business.
All street cabinets in Derry are now upgraded with fibre-to-the-cabinet technology, offering super high speed broadband connectivity to 39,000 properties. Download speeds of up to 40Mbps are now available, which will increase next year to up to 80Mbps. High speed broadband is available on an open access basis via BT and its competitors.
Colm O’Neill, chief executive of BT in Northern Ireland, said: “The delivery of this ambitious project within a tight timescale involved vision, collaboration and commitment from stakeholders who shared a common objective to realise Derry’s aspiration to be a digital champion.
“This next generation broadband network will provide a future-proof foundation to support Derry’s economic, social and cultural aims, and we are proud to be at the heart of many of the pioneering projects this exciting city has planned for this generation and the next.”
In a further move to improve the broadband infrastructure across Northern Ireland, the Department of Enterprise, Trade and Investment has approved an additional £215,432 to improve broadband access in rural areas. The funding has been awarded to North West Electronics through the £1.9million Northern Ireland Broadband Fund, which is co-financed under the European Regional Development Fund Sustainable Competitiveness Programme 2007-2013.
North West Electronics will extend its existing fixed wireless network to offer a range of broadband services to business and residential customers in the Dungannon, Larne, Antrim, Fermanagh, Down, Armagh, Ballymena and Newry areas. The project will use the Derry-based Project Kelvin telecommunications infrastructure to increase speeds to the areas of need.
Enterprise minister Arlene Foster said: “There are areas of Northern Ireland where a fixed line solution is not possible for technical and commercial reasons. The Broadband Fund enables local businesses to demonstrate how a range of technologies can deliver broadband services to rural users. On completion by March 2012, this project will deliver access to broadband services of at least 10Mbps to business and residential premises, in areas where access has been limited.”
NAMA promises ‘no fire sales’
Ireland’s National Asset Management Agency has again ruled out any ‘fire sales’ of properties either side of the border and says it is willing to be patient while it waits for asset values to recover. Frank Daly, NAMA’s chairman, told a private Northern Ireland Chamber of Commerce briefing that NAMA will work in Northern Ireland to help stabilise the market, generate transactions, provide liquidity and encourage phased asset disposals.
Mr. Daly told the meeting that the Agency was committed to listening to stakeholders in Northern Ireland with a view to helping devise tailored local solutions. “We want to ensure that our approach is appropriately tuned for the Northern Ireland market,” he said. “We have developed good relationships with policy makers in Northern Ireland and [with] other stakeholders and we will continue to listen carefully to what they have to tell us.”
Francis Martin, President of the Northern Ireland Chamber of Commerce, responded: “A healthy and functioning banking sector is key for growth and NAMA’s role in supporting the distressed sectors in banking is a crucial step in strengthening our financial institutions and rebalancing our economy.”
In a briefing to the Irish Dail, NAMA told TDs that it was unhappy that UK banks were disposing of assets in Ireland at prices that were too low and were having the effect of depressing values.
Meanwhile, finance minister Sammy Wilson announced that Peter Stewart is stepping down as a NAMA director and as chair of the NAMA Northern Ireland Advisory Committee. No replacement has yet been announced.
Large retailers make tax plea
The proposed new levy on large retailers should either be scrapped, or substantially amended, says the Northern Ireland Retail Consortium in its response to consultation by the Department of Finance and Personnel. NIRC – the sister body to the British Retail Consortium – has urged MLAs to give the measure full scrutiny and not use the accelerated passage procedure to rush it through the Assembly.
Finance minister Sammy Wilson plans to use the Large Retailer Levy to pay for rate relief for small businesses. But NIRC argues that the draft measure is badly framed and would in practice subsidise many large businesses – including bookies and banks – that operate from small premises.
NIRC says the relief should either be restricted to genuine small retailers or all large businesses should contribute. It also believes the measure should be time-limited. Without those changes, says NIRC, inward investment could be put in jeopardy.
Northern Ireland Retail Consortium Director, Jane Bevis, explained: “The retail sector has the potential to attract major investment to Northern Ireland. It’s in a position to drive community regeneration while creating jobs. But, instead of appreciating that the sector is a key part of rebalancing the economy, the Executive is preparing to single it out for extra taxation.
“We understand that small retailers face tough times, which is why we support small business rates relief as a short-term measure. But it must genuinely be targeted at small businesses and it must be designed so that it doesn’t deter inward investment.”
Tesco, a member of the NIRC, said publicly that the proposal put at risk its investment plans. Sammy Wilson told the Assembly that “Tesco’s response to this has been — I choose my words quite deliberately — absolutely pathetic.” He continued: “Here is a major company that is used to bullying its way around. However, it is not going to use bully-boy tactics on something that the Assembly has looked at, that has been proposed in the Budget and is a sensible way forward.”