John Lowry, Workers’ Party West Belfast candidate, sees the spectre of stagflation retuning to plague the economy
The private sector in Northern Ireland is in crisis, with terrible consequences for employees. Northern Ireland firms have reduced their workforce numbers each month since March 2008, with Northern Ireland the only UK region not reporting a rise in staffing levels.
According to Ulster Bank chief economist in Northern Ireland Richard Ramsey: "Over the 40-month period since November 2007, the PMI has signalled a contraction in private sector output each month bar one”. Mr Ramsey believes that this contraction in the private sector has reached the end but given the parlous state of the economy, whatever growth is achieved is bound to be sluggish. Moreover, we have yet to see the impact of the Cuts Agenda on jobs in the public sector and the dreadful knock-on effects that will have on our economy.
According to research done by Lloyd’s bank, growth, where it occurs at all is likely to happen mostly in the south-east, of England. In other words we will see two-speed recovery, with Northern Ireland dragging behind in a slow speed of its own .
There are also concerns over firms facing ever rising costs, with higher fuel costs to more than $125 a barrel being cited as a particular problem. In UK-wide terms, as the Guardian puts it, “ gloomy data poses a dilemma for the Bank of England's monetary policy committee”, which, “is under pressure to raise rates to combat rising inflation” while signs from industry that firms passing on costs in the form of higher prices suggest that “inflation will continue rising beyond the summer”. Basically, we are talking about the kind of stagflation – rising unemployment couples with rising prices – that plagued the British economy a generation ago. This is not what the economic illiterates in the Con-Dem government expected.
Issued: 13th April 2011