North to suffer most over Cameron cuts
NORTHERN Ireland's economy is set to suffer more than any other region affected by British Prime Minister David Cameron's austerity drive, accounting firm PricewaterhouseCoopers (PWC) said in a report yesterday.
The Office for Budget Responsibility (OBR), which is due to report next week on the best measures to save money, has already warned that 600,000 public sector jobs could be lost as the British government cuts spending over the next four years.
Northern Ireland, where even the private sector is highly dependent on state spending, is likely to be worst hit by the review, PWC said.
The local economy is already struggling with the purchasing managing index published earlier this week, showing the economy has declined every month since December last year. The spending review could cost 20,000 public sector jobs and a further 16,000 private sector jobs in the North, PWC's Esmond Birnie said.
Construction and business services will be the worst-hit sectors in the UK economy, PWC added.
The firm calculates that Mr Cameron's austerity measures may chop 3.4pc from total employment but will not lead to a double-dip recession because job losses will be offset by lower interest rates that encourage private sector growth, said John Hawksworth, chief economist at PWC.
The OBR has forecast that the private sector will provide 1.6 million jobs over the next four years to make up the shortfall in public sector employment.
Mr Hawksworth said the numbers were ambitious, as recent indicators had been worse than expected. "I expect the OBR to revise down growth and employment numbers, and back off from their slightly bullish forecast," he said.