Waiting for the Economic Impact of Terror Attack
IT is difficult to know how to start this view, appearing as it does one week after the tragic events in the United States, in which democracy itself came under attack.
Nothing should detract from the sheer scale of the human tragedy which has occurred, and its effects on the lives of thousands of people. I am sure that I speak for the whole of the Northern Ireland business community when I say that our sympathy and understanding go out to all the families, friends and colleagues of those caught up in the horrific events of last Tuesday.
President Bush and Prime Minister Blair have encouraged all of us to get back to `business as normal' and make a defiant stance against global terrorism.
It is too early to say what the economic impact of the attacks and the likely repercussions will be on the world economy. Much will depend on how the ordinary person on the street responds to this tragedy.
Consumer spending has been the main driver of the economics on both sides of the Atlantic. If consumer spending and confidence is maintained, then the US and Europe should keep out of recessions. Everything should be done to bolster that confidence.
The CBI's message to the Monetary Policy Committee is that it is time for another cut in interest rates to cope with the continuing downturn reported by exporting manufacturers.
We have been saying over the last few months that interest rates should fall in the autumn, and the events last week have strengthened our call. A cut is needed to stimulate the economy and maintain consumer confidence.
This is particularly the case as far as Northern Ireland is concerned. Our latest Business Confidence Survey, published last week, and taken before the attacks on the US, showed that confidence in the local economy was still falling, and was at its lowest level since the survey was started in 1986.
This plummeting confidence in the Northern Ireland economy, which is still recovering from the foot-and-mouth crisis, is undoubtedly linked to the continuing lack of political stability and apprehension about the future of the Assembly, combined with increasing concerns about the global economy. …