Good afternoon, it is January 25th 2021 and here is your economic and market update from BlackBee.
- Bank of Irelands Economic Pulse shows decline in confidence in January.
- Interest rates reduced on State saving schemes.
Following the reintroduction of level 5 restrictions in January both business and consumer confidence fell in January. The Bank of Ireland Economic Pulse fell to 61.6 in January. This is down 8.6 from December and 24.5 from a year earlier. Bank of Ireland stated that 35% of firms expect business activity to decline in the next three months. This is down from 59% in April 2020 and the expectation of a decline in business activity would be a reflection of tough level 5 restrictions imposed. Due to uncertainty of the direction of economic policy, 52% of households said that they are holding out on spending. This has fallen from 61% in April 2020. Although firms were downbeat on the prospects for the next three months, the survey showed that growth ambitions on a longer time frame were back at pre-pandemic levels. Three in five firms said that they are planning on expanding in the next one to three years. (Source: BOI & RTE).
The National Treasury Management Agency have cut interest rates attached to several State savings products and have reduced the prize bond fund. The NTMA have said that the changes reflect the low interest rate environment in financial markets. There is around €18.8 billion held in State saving schemes. The decline in interest rates is another blow to savers and highlights the need to look elsewhere to generate solid returns and outperform inflation over the medium term. (Source: Irish Times).
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Global Market Update
(as at close of markets 22/01/2021)