Economic Analysis

The second Federal Reserve meeting of 2026 saw the central bank leave interest rates unchanged. The target range for the Fed funds rate was left at 5.25–5.50%. The accompanying statement was largely unchanged from January’s edition, but the Fed did note that “recent geopolitical tensions, particularly in the Middle East”, could pose risks to the outlook.

The manu. PMI rose to 53.7 in Mar, amid solid gains in output, new orders, export orders and employment. Business expectations moderated for a second consecutive month Traditional industrial production stagnated in the 3 mths to Feb., but it was 3.1% lower YoY 

Foreign Currency and Interest Rates from 2025

The second ECB Governing Council policy setting meeting of 2026 saw the central bank leave interest rates on hold.
The deposit and refi rates were maintained at 2.00% and 2.15%, respectively. This outcome was in line with market expectations, and marks the sixth consecutive meeting that the central bank has left its official rates unaltered. In total, the central bank cut rates by 200bps during its easing cycle.

The second policy setting meeting of the year of the Bank of England’s Monetary Policy Committee (MPC), saw the central bank leave the Bank Rate unchanged today, at 3.75%.
This outcome was very much in line with market expectations. The most recent rate cut from the BoE occurred at its December meeting, when it lowered the Bank Rate by 25bps.

The Irish residential property market remains defined by tight supply as 2025 draws to a close. However, over the course of the year, there have been some encouraging signs in the suppy dynamics, albeit the outlook remains challenging. 

This Budget is set against an uncertain economic backdrop so far this year. GDP growth was robust in the early part of the year but has since moderated. The Chancellor had committed to not raising taxes materially further following last year’s hikes to national insurance (NI) on employer contributions, which among other measures raised £40bn. While the tax rises are largely to fill the hole in the fiscal rules, there are also net spending increases in the budget

The global economy entered 2025 in good shape, with indicators pointing to stronger growth in the Eurozone and UK, and continued robust, yet moderating growth in the US. However, the uncertainty created by the imposition of US trade tariffs, followed by partial 90-day delays, has created volatility in financial markets and concern in the real economy.