Economic Analysis

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”. 

Manufacturing PMI rose to 51.3 in January, indicating a first monthly expansion since October. The services PMI fell to 53.4 in January, consistent with a slower pace of expansion. Retail sales were 0.4% lower YoY in December. Housing commencements 12 month running total at 60.6k in January.

World economy continues to exhibit uneven growth. US remains an outperformer, with signs of weakening growth in the Eurozone. Core inflation remains sticky in most markets, particularly the UK, with risks still tilted to the upside for inflation. Central banks will continue on a cautious downward trajectory in 2025 given current uncertainties.

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...