CONSUMER CONFIDENCE in the North is uncertain but could suffer in the wake of tomorrow’s British government spending review, research carried out for Northern Bank has revealed.
The bank reported yesterday that the consumer confidence index remained static in the third quarter. However, it warned that confidence levels could be hit as households anticipate higher taxes and a fall in disposable income following the statement to be delivered by the chancellor of the exchequer tomorrow.
George Osborne is expected to cut billions from the Stormont grant, and Northern Bank says much will depend on the Stormont Executive’s response, in particular its ability to protect public sector jobs.
“It is expected that in the next few months local confidence levels will be very much influenced by this week’s comprehensive spend- ing review, in particular the Executive’s response to the CSR and their ability to produce a timely ‘coping’ strategy that does not include significant job losses in the immediate future,” the bank reported.
“According to a report by PwC accountants, Northern Ireland could lose 36,000 jobs by 2014-15 owing to public sector spending cuts. However, the Confederation of British Industry in Northern Ireland has recently published a detailed document entitled Time for Action which proposes a range of initiatives for delivering public services with a reduced budget while avoiding large-scale job losses.”
Northern Bank economist Angela McGowan said: “Households appear to be factoring higher taxes and lower benefits into their financial outlook.”
“Despite the fact that job losses in Northern Ireland have been relatively low compared to other regions, there has simply been a shortage of good economic news.”