The October meeting of the ECB’s Governing Council saw the central bank cut interest rates for a third time this year. It reduced rates by 25bps, with the Deposit rate lowered to 3.25%, while the Re-fi rate was decreased to 3.40%. Today’s policy easing represents the first consecutive rate cuts from the ECB in 13 years, as it also lowered rates at its previous meeting in September.

Mortgage approvals fell by 2.3% YoY in the 3 mths to July. 12 mth running total rises to 42.1k. Consumer prices rose by just 0.1% in Aug, meaning CPI inflation fell to 1.7%, its lowest level since June 2021. Overall, the unemployment rate has remained quite low so far this year. Total tax take up 12.6% YTD in Aug. Voted expenditure rose by 13.7% YTD, owing to increases in current and capital spending. 

The September meeting of the US Federal Reserve Open Market Committee (FOMC) saw the central bank cut interest rates for the first time since 2020. The target range for the Fed funds rate was reduced by 50bps to 4.75-5.00%. It marks the first rate change from the Fed in nine meetings. 

The August meeting of the Bank of England’s Monetary Policy Committee (MPC) saw the central bank lower the Bank rate by 25bps to 5.00%. This was the first rate change from the Bank of England in eight meetings. Subsequent to this, the central bank had been on a rate tightening cycle over the period December’21 to August’23. Market expectations had leaned towards a rate cut in the lead up to today’s announcement. 

World economy continues to exhibit resilience. However, subdued growth evident again in 2024, with US outperformance starting to wane, UK accelerating, and Eurozone flagging.  Core inflation remains sticky in some markets, particularly the UK, with consumer spending underpinning high core inflation, however, headline inflation is now close to target in all markets.

Ireland’s key trading partners continue to grow at a steady, if unspectacular pace. The US economy has outperformed the UK and Eurozone of late, but European economies are showing signs of accelerating growth in 2024

Renewed momentum in Irish residential property prices...

Historic FX & Interest Rates for 2023....