Growth in Northern Ireland is set to remain well adrift from the rest of the UK an economist has warned.
The UK economy grew by 0.7 per cent in the second quarter of 2015, according to Office for National Statistics (ONS), but PwC chief economist Esmond Birnie said growth here was unlikely to pass two per cent in total this year or next.
As expected, he said the ONS made no change to their earlier estimate of growth for the three months to June, which reflected a sharp rise in oil and gas production.
As such, Dr Birnie said the UK recovery continues at reasonable strength:
“Notwithstanding all the uncertainties around Greece and the Euro and the recent financial turbulence associated with the “Great Fall of China”, today’s data suggest that growth was well balanced, with consumer spending up as stronger real earnings growth offset slower employment growth.
“We would expect this kind of growth to continue over the rest of the year, as robust UK domestic demand, steady US growth and a gradually improving outlook for the Eurozone offset problems in China and other emerging markets.
“Lower prices of oil and other commodities, due in part to the Chinese slowdown, will help to keep down headline inflation in the UK and support continued real growth of household incomes and consumer spending.
“Whilst we do not have such timely “official” GDP/GVA data relating to the Northern Ireland regional economy, the recent figures from Northern Ireland Composite Economic Index indicate that trend growth continues albeit with a substantial lag behind the UK average.
“PwC’s own forecast is that NI growth in 2015 and 2016 will be 1.8 per cent and 1.7 per cent respectively, well behind the UK average and most of the UK regions.
“Of particular note, given our relatively fragile recovery is that recent problems in China and global equity market turmoil could stay the MPC’s hand for the next few months, but we still expect UK interest rates to rise gradually from early 2016 onwards if the domestic recovery remains on track.”