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Political unease hits Northern Ireland consumer confidence

Published 30/07/2015

A new Conservative government and a row over Stormont's £600 million black hole could have hit consumer confidence, a study shows
A new Conservative government and a row over Stormont's £600 million black hole could have hit consumer confidence, a study shows

Consumer confidence in Northern Ireland has taken a hit, with the political situation at Westminster and Stormont highlighted as potential causes.

After recording a strong performance in the first quarter of 2015, Danske Bank's consumer confidence index dropped between April and June.

The index examines the financial position of local households and their expectations for the year ahead.

The latest report recorded an eight-point fall during the last quarter, bringing it back to June 2014 levels.

Danske Bank's chief economist Angela McGowan said the election of the Conservative government in May, along with its public commitment to further austerity, may have hit confidence.

She said the political impasse at Stormont, which has left the power-sharing Executive facing a £600 million plus hole in its budget, may also have caused concern.

"Although the economy in Northern Ireland is still expanding it is possible that local confidence levels have been impacted by a number of national and local events," said Ms McGowan.

"The outcome of the UK election and its ramifications for further austerity over the next five years could be reflected in this recent survey.

"In addition, the £600 million black hole in Northern Ireland's budget combined with fines from Treasury (for non implementation of welfare reforms) and the negative consequences of these for local public services may be starting to impact on local confidence levels.

"It remains to be seen if this is a one-off blip in the index because of the UK election or the beginning of a downward trend for the region because of local public spending constraints.

"With clear signs of growth in the local economy there, is a fair chance that the index will pick up again.

"Indeed, we have recently seen confidence levels in the UK falling just after the general election only to bounce back to a 15 year high the following month."

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