Interest rates could be close to their peak, according to Ulster University economist

As Danske Bank forecasts Northern Ireland's economy entering recession in 2023, Gareth Hetherington said it is likely to recover during 2024.

Mr Hetherington, director of the Ulster University Economic Policy Centre (UUEPC) said: “Just as many economies around the world were recovering strongly from the impacts of the pandemic, higher energy prices has created a new economic shock. This is increasing the economic

stress on households and businesses in Northern Ireland and at the same time, the Bank of England are increasing interest rates to bring inflation back under control.”

Mr Hetherington added: “Although the UK Government has responded by providing support to both businesses and households to mitigate the worst impacts of higher energy prices, the public finances are such that any further support will be limited to those in greatest need.

"Therefore the types and scale of measures introduced during the pandemic will not be repeated in 2023 marking a change in policy approach from dealing with the impacts of the pandemic.”

The UUEPC said: "Interest rates were just 0.25% in January 2022 and therefore this year will be seen as the year when monetary policy moved towards normalisation after over a decade at emergency low levels.

"The last increase from 2.25% to 3% in November is unlikely to be the last, but the market has significantly revised down its anticipated peak rate since the infamous mini-Budget and rates may now be closer to their peak than many think."