Northern Ireland firms target Europe as trade fears grow in Republic
Firms in Northern Ireland have been moving away from doing business in the Republic over worries about the country's financial woes for some time, a Bank of England policy-maker has said.
Andrew Sentance, an external member of the Monetary Policy Committee, visited companies and addressed a lunchtime event for the CBI in Belfast yesterday.
He said signs of recovery in the UK were encouraging but that a rise in interest rates from the present low of 0.5% will be crucial to stability.
"My message and the message I am getting from businesses in Northern Ireland is that we are getting back to business," he said.
"At a time when the public sector is reining back, which will have a big impact in Northern Ireland, the private sector will be the driver of the recovery.
"Businesses have seen a reduction in employment that is much less than we've seen in previous recessions and that gives grounds for encouragement and more optimism for an upturn.
"The UK's financial position is stronger than in previous recessions and a rebalancing in the public and private sectors will come sooner than in previous times of difficulty."
He said that Northern Ireland was abandoning business in the ailing Republic. "The problems in the south are something businesses here in Northern Ireland are particularly conscious of," he said.
"The message I have been getting on this visit is that, for some time, firms here are re-orientating business away from the Republic as this is not the first time of difficulty it has been experiencing.
"Northern Ireland businesses are managing to expand into the rest of the UK and elsewhere in Europe. For this reason, I think that the current financial problems in the Republic will not have too much of an impact on Northern Ireland as long as the rest of the eurozone bloc, including Germany, which is thriving, continue to do well."
Mr Sentance, a strong supporter of putting up interest rates, added: "On the flipside, there are warnings that inflation will rise and to counteract that we need to raise interest rates and that needs to being now, in a gradual way.
"Rises like this are not something anyone looks forward to and shouts 'yippee' but it needs to happen gradually and not suddenly."