Record inflation takes toll on Northern Ireland economy

Record inflation has taken its toll on the Northern Ireland economy and caused a fall in demand last month, according to a survey by Ulster Bank.

In July, business activity in Northern Ireland fell at the fastest rate since February 2021, with a drop in output and new orders.

It was the sharpest contraction since November 2012, despite the Covid pandemic and lockdown restrictions.

Richard Ramsey, Ulster Bank's chief economist in Northern Ireland, said that retail recorded the steepest declines in sales and orders because of the cost-of-living crisis.

Retail sales have plunged over the last three months and retailers expect sales to be broadly unchanged in 12 months' time. There was no positive that firms were still hiring more staff, according to the survey.

Employment continues to be a bright spot with all four sectors increasing their staffing levels in July.

With the Bank of England predicted a UK recession, a softening of the labour market will be expected to occur in the year 2023.

The labour market is likely to be more robust this time than in previous recessions.