The NI Agri-Guild Business Breakfast briefing in Ulster Bank’s Belfast head office was the earliest and wettest start. But at least we arrived to hear some good news for a change. The bank’s popular measure of food price inflation, compiled by its Chief Economist, NI, Richard Ramsey, showed that the collective cost of items in a traditional cooked breakfast have fallen by 8.5 per cent in just 12 months.
This makes the cost of these items the cheapest they have been since October 2008, according to the index. But whilst the collective price of these breakfast items is at its lowest in over seven years, looking over the longer-term Mr Ramsay revealed they are some 26 per cent dearer than they would have been 10 years ago, and 37 per cent more expensive than in April 1998.
Our assembled group of agricultural and business journalists and agri-food industry professionals were told that “food makes up a significant proportion of household spending and food and drink is also a key sector of the Northern Ireland economy. So understanding how the prices of food stuffs are changing gives us some insight into both the current state of consumer finances, and also some of the challenges facing the agri-food industry.”
There was no getting away from the fact that households have been benefiting from low or no inflation, falling food and energy prices, wage rises, and historically low interest rates, describing it as a sweet spot for consumers.
However appetising as all that sounded, Mr Ramsay had some not-so-tasty ‘tit bits’ to share with us on the rate of recovery of UK economy and the performance of the farming sector within that. He revealed a picture of weak recovery (only 2% year on year growth in real terms) with total income from farming down 42%.
He finished by outlining the PR fiasco around the Chancellor’s latest budget announcement on welfare cuts ending in the resignation of Ian Duncan Smith. His conclusions were that the UK’s finances “were in a mess” and that we were vulnerable to any negative economic shock such as a Brexit Yes vote which could open up ‘an avalanche of uncertainty’ for Northern Ireland. He pointed to NI’s reliance on exports to EU, in particular to the Republic of Ireland, which to just lay it on even thicker, is basking in the sunshine of the strongest economic recovery in Europe.