Category: Weekly Round Up

Weak economic outlook for euro area

Yesterday’s decision by the ECB to cut its deposit rate by a further 25bps to 3.5% came as no surprise to markets. The overnight index swap curve now implies the ECB will cut the deposit rate at least once more in 2024, falling to 3.12% in December and to 1.85% by end-2025. Perhaps more striking […]

Central Banks set to cut rates through 2025

This week we published our latest Bank of Ireland, Global Markets Watch. A key theme is that confidence has grown amongst financial market participants in recent months that CPI inflation rates are durably returning to central banks’ 2% targets. In part, this reflects tentative signs that the US economy is slowing, accompanied by the temporary […]

Earnings continue to rise steadily

Earnings data shows that wages continue to rise but at a relatively modest pace considering the recent period of elevated inflation post pandemic. Hourly earnings rose by 5.4% year-on-year (y-o-y) to €29.71 in Q2. However, as inflation has fallen back considerably now, real incomes are rising steadily, and with inflation set to remain low, there […]

Strong employment gains continue

There appears to be little sign of a slowdown in jobs growth in Ireland, with seasonally adjusted employment increasing by 0.8% quarter-on-quarter in Q2 2024. This follows similar gains in each of the preceding three quarters with total employment rising to new high of 2.75m. Job gains are broad based and, while the unemployment rate […]

Mixed consumer picture

Despite many positive headwinds for consumers over the past twelve months, they still appear somewhat wary as we head down the back half of the year. While inflation has continued to ease and real incomes are growing – helped by rising wages and tax cuts – retail sales were soft in Q2, though we do […]

Fed to begin rate-cutting cycle in September

Last Friday’s weaker than expected employment report in the US prompted fears of an impending recession and sparked a dramatic reaction in financial markets, with bond yields plunging, stocks selling off sharply and the dollar weakening. While these moves have been substantially reversed since, the market sees the Fed kicking off what is expected to […]

Distortions to Irish GDP data looked to have played out

This week’s preliminary Irish GDP data for Q2 2024 showed a 1.2% quarter-on-quarter expansion, after a 0.7% gain in Q1. This suggests the measurement distortions related to the multinational sector that led to a 5.5% contraction in Irish GDP in 2023 have now played out. That said, the rebound in H1 may not be sufficient […]

An uncertain outlook for Irish housing completions

The outlook for Irish housing completions is now especially uncertain. Yesterday’s CSO data showed 6,884 completions in Q2 2024, down 5% on the year, a disappointing out-turn. This suggests the early timing of Easter did hurt Q1’s especially weak figures, but the disruption to housing starts in 2022 from elevated energy costs, build cost inflation […]

CSO projects Irish population of 5.6-5.8 million by 2030

This week the CSO published updated population projections for Ireland. Population growth in the range of 0.8%-1.2% per annum is forecast out to 2030, or by 6%-9% cumulatively to 5.6 5.8million. In comparison, the IMF’s projections for the twenty euro area countries’ population is for only 0.2% growth per annum through 2023-2029 to 351 million. […]

Economics Weekly July 12th

This week’s MyHome report showed asking price inflation accelerating to 7.3% in Q2 2024, the fastest pace in two years. Furthermore,  residential transactions in June were being settled at 6% above the original asking price – indicative of intense competition amongst homebuyers. The fresh momentum in Irish house prices is being driven by the resilient […]