Growth in the Isle of Man economy falls sharply, inflation remains relatively high in Jersey, and the Gibraltar Chief Minister highlights the Rock’s economic success to a London audience

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The Isle of Man’s key annual report measuring the Island’s economic performance was published this month.

In 2018, GDP increased in real terms by 3.6% on an annual basis, to £5.3bn. This compared to a real term increase of 7.4% in 2017.

E-Gaming and insurance were the main drivers of growth and other professional services also contributed. E-gaming grew 18%, agriculture declined 30% and tourist accommodation fell 21%.

In terms of the sector share of the economy, EGaming had 21.1%, followed by Insurance 17.6%, ICT 9.1% and Other Financial and Business Services 8%.

Unemployment on the Isle of Man increased by 0.1% in October to 0.8%. In comparison, Northern Ireland recorded the lowest rate in the UK at 2.5% with the overall UK rate at 3.8%.

On economic development, an Island urban regeneration scheme targeted at designated streets in town and village centres will be revamped. Previously funding applications had to be approved by individual regeneration committees and the Chief Minister’s steering group. Now businesses can apply for funding directly from the Department for Enterprise, cutting out layers of bureaucracy. Since 2009, £13.4m has been used to fund 223 projects.

A £60m fund has been set aside to pay for flood defences across the Isle of Man. Severe flooding in 2015 found 11 areas of the Island to be at high risk, and heavy rain in October caused severe flooding in many areas.

On transport, a new £38m ferry terminal connecting Liverpool and the Isle of Man will not be completed until July 2021. Initial work on the Merseyside site has started, but planning approval is required for a new link road and dredging of the riverbed.

In the air, low-cost airline Flybe, has announced plans to fly between the Island and London Southend for the first time in 2020. The airline has also confirmed plans to end its service to London Stansted, less than a year since it was launched.

Flybe was bought by the consortium Connect Airways earlier this year and services will be run by Stobart Air. The company announced in September it would shut down its Isle of Man base by summer next year.

Channel Islands

Jersey’s RPI (Retail Price Index) decreased 0.1% to 2.7% during the 12 months to September 2019. Almost all groups saw prices increase, with housing, household services, leisure services and food groups being the largest contributors. However, housing, and household and leisure goods, recorded lower rates of price increases relative to the previous period. The cost of food, and of fares and other travel, added to the inflation rate.

CPI (Consumer Price Index) inflation in Jersey over the 12 months to September 2019 was 0.8% greater than the comparable measure for the UK (1.9%)

Jersey’s latest property index has shown the average price of housing sold in Jersey during the quarter ending Q3 2019 was 2% higher than the previous quarter, an uplift of 8% annually.

On unemployment, the total number of people registered as actively seeking work was 30 lower than at the end of the previous quarter and 50 lower than at the end of the corresponding quarter in 2018 (Q3 2018). The non-seasonally adjusted total unemployment was 920.

In Guernsey, there were 296 people registered as unemployed. The rate of 1% was the same as the previous year. Median earnings as at 30th June 2019 were £33,622 which, compared with a year earlier, was 2.8% higher in nominal terms and 0.9% higher in real terms.

At the end of September 2019, Guernsey’s annual inflation, as measured by the changes in the RPIX, was 2.0%. The RPIX, which excludes mortgage interest payments, is the Island’s preferred measure of inflation.

The RPI change in September 2019 was also 2.0%. This compares with 2.4% in the UK and 2.7% for Jersey. Key drivers were leisure, up 0.9%, and housing costs up 0.4%.

Gibraltar

Two Memorandums of Understanding have been signed by the Gibraltar and UK Governments.

As a result the UK has agreed to underwrite some Brexit contingency projects on the Rock. Funding for an access ramp at the port at a cost of £390,000, and waste disposal machinery at a further £862,000, will be met by the UK. The objective of the ramp project is to provide Gibraltar with greater resilience by sea in the event of a difficult border.

Also, in all post-Brexit bilateral deals the UK does, Gibraltar will be given an opt in or opt out, depending on whether it will benefit the Rock’s economy, according to Business Minister, Sir Joe Bossano.

In London, a Gibraltar delegation visited the World Travel Market at the ExCel, and the re-elected Chief Minister addressed a financial services lunch at the Gherkin.

During his speech, Mr Picardo pointed out the increase in the Rock’s GDP from £1.2bn in 2011 to over £2.4bn now, and highlighted a GDP to net debt ratio of c12%. Unemployment in the Territory stands at 37.

The Chief Minister said his new Government’s Post Brexit Economic Plan estimated 15% growth over the life of the next Gibraltar Parliament.

In a vote of confidence in the Rock, and despite Brexit uncertainty, the new look Morrisons Gibraltar officially opened on Thursday after a £6m upgrade. On tourism, the Sky Princess cruise ship had its inaugural visit to Gibraltar. The liner is on its maiden cruise and disembarked 3600 passengers and 1400 crew on the Territory.

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