Wednesday, November 30, 2022

The economist warns that we are dealing with a deadlocked economy

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The chancellor is set to announce his fiscal plan later this week, with Jeremy Hunt preparing “staggering” public services cuts.

The Bank of England has warned that we are entering the longest recession in 100 years.

Interest rates are at their highest in almost 20 years.

A pretty bleak picture of the economy.

Sectors like hospitality are early indicators of how people are feeling about the crisis.

Pubs and restaurants have no illusions, they rely on voluntary spending, in other words, people don’t spend much until all other bills are paid.

Hospitality Ulster’s Colin Neill says: “People are cutting down and not coming out twice a week.

“While we may be busy, we are busy losing money.

“All the costs make it difficult to make any money at all.

“In January we will see challenges as people hold back after Christmas when fresh tax hikes bite.”

Wages don’t reach as far as they used to, things seem to be getting harder before they get better.

Lisa Wilson of the Nevin Institute of Economic Research says: “A lot of people are already living this, things have been bad for a long time”.

“It’s a very frustrating place, you’re looking at an economy that’s stuck, it’s stagnant,” she says.

People can work for the last 20 years and are no further ahead in terms of their consumption and standard of living.

The large sector that fears cuts the most is healthcare. This is where you start cutting back on a service that is already under pressure and struggling to deliver on its current budget.

Rita Devlin, from the Royal College of Nursing, says: ‘Healthcare has collapsed, there is no other word for it’.

“It’s underfunded and has been under management for a number of years,” she says.

“I don’t know where to save the money that they can’t take out anymore.

“We’re at rock bottom at the moment.

“Sometimes we seem to be smart and to be stupid.”

Some of the most vulnerable in society fear this week’s fall declaration could impact them

Beneficiaries and those on Universal Credit hope for an inflationary surge in the money they receive from the government, anything else and the war would have dire consequences.

Ulster University’s Deirdre Heenan says: “The fear is that the Chancellor will not deliver on Rishi Sunak’s promise earlier in the year that he would increase benefits in line with inflation.

“If he doesn’t, it will be a blow to families across NI.

“This is the poorest region of the UK and would push more families further into poverty.”

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