Economic Analysis

President Trump’s tariffs have unwound decades of global trade liberalisation, jolting markets and leading to revisions in global growth forecasts.The ultimate impact of the tariffs remains unclear given the volatility of US trade policy announcements. Most forecasters expect the greatest hit to be on the US domestic economy. Central bank outlook clouded by trade policy uncertainty.

The Manufacturing PMI rose to 51.9 in Feb, indicating the fastest pace of growth in a year. The Services PMI eased slightly to 53.2 in Feb, consistent with a slower pace of expansion. Mortgage approvals rose by 8.0% in the 3 mths to Jan. Overall, GDP expanded by 1.2% in 2024, largely due to a sharp rebound in exports of 11.7%.

The March policy setting meeting of the Bank of England’s Monetary Policy Committee (MPC) saw the central bank leave the Bank rate unchanged at 4.50%. Today’s decision was very much in-line with market expectations. The most recent policy change came at the previous meeting in February, when the MPC cut official rates by 25bps.

The first meeting of the US Federal Reserve Open Market Committee (FOMC) for 2025 saw the central bank leave policy on hold. The target range for the Fed funds rate was maintained at 4.25-4.50%. This was the first time in four meetings that the Fed did not cut interest rates, having previously reduced rates by 100bps over the course of its last three meetings in 2024.

The March meeting of the ECB Governing Council saw the central bank cut interest rates for a second consecutive time this year. The Governing Council noted that “the disinflation process is well on track”, with inflation continuing to develop “broadly as staff expected”. 

Historic FX & Interest Rates for 2024....

Growth in Ireland’s key trading partners uneven, geopolitical risks to the fore. Irish economy expected to grow at a moderate pace in the coming years. Households remain cautious in spending patterns. US dollar dominance tested by macro trends.

Renewed momentum in Irish residential property prices...