Belfast Telegraph

Northern Ireland economy likely following GB slowdown: expert

By John Mulgrew

Northern Ireland is "likely" following a UK trend showing an overall slowdown in the economy, an expert has said.

The UK economy suffered a slowdown at the start of the year as the services sector came under pressure and inflation dealt a blow to household spending.

The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.2% in the first quarter of 2017, revising down the figure from its initial estimate of 0.3%.

Dr Esmond Birnie, of Ulster University, said while there may be a "touch of seasonality" to the figures, the slowdown could be down to "less favourable outcomes" in retail and hospitality.

Economists had been expecting GDP growth to slow from 0.7% in the fourth quarter of last year, but they had pencilled in growth of 0.3% for the first three months of this year.

"Last month, the ONS estimate was that the UK economy started this year with a growth rate of 0.3% in the quarter, (but) that figure has now been reduced to 0.2%," Dr Birnie said.

"Significantly, this revision can be attributed to a less favourable outcomes in terms of the retail and hospitality sectors and, indeed, the service sectors more generally.

"This is suggestive of the impact of higher inflation, now at 2.7% in April's figures, in squeezing what had hitherto been rapid growth in consumer spending.

"There may be a touch of seasonality in the figures. The Q1 figures for 2015 and 2016 were similarly low, so some improvement in the middle of this year is possible.

"However, when taken together with recent labour market data, a slowdown in the UK's economic recovery is suggested. While we do not have as up-to-date figures for Northern Ireland, the likelihood is that we are following the UK-wide trend".

A slump in the value of the pound since the Brexit vote has bumped up the cost of the living as manufacturers and retailers pass down rising import prices to consumers.

Inflation hit its highest level in nearly four years last month at 2.7%.

Belfast Telegraph

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