Daniel McLaughlin

Lecturer in Economics and Finance, Consultant and Commentator on economic issues.

[Daniel McLaughlin @drdanmclaughlin]

Flash euro inflation in May was 3.2%, compared with 1.9% a year earlier. However, rising energy prices the main culprit and ex food and energy inflation is actually marginally lower, at 2.3% than it was at that time. ECB will lean heavily on expectations to justify June rise.

[Daniel McLaughlin @drdanmclaughlin]

ECB now teeing up June rate rise but at the April meeting, which left rates unchanged, a ' number of members noted that the decision was a close call and that they would not have opposed raising rates'. Then the market was pricing in two rate increases in 26, now largely three .

[Daniel McLaughlin @drdanmclaughlin]

Big change in the Irish labour market revealed in Labour Force Survey. Seasonally adjusted employment fell by 16k in q1 and up just 400 on the year, with large job losses in Hotels, Restaurants and ICT. Participation rate also fell sharply, and UR rose to 4.9%.

[Daniel McLaughlin @drdanmclaughlin]

@MarketBlondes yes , tension between weaker flight demand and cost pressures although Ryanair said it had hedged 80% of jet fuel at $67 till next March. Irish government has cut excise duty on fuel (twice) till July which helps. I have 4.5% peak assuming broadly stable oil.

[Daniel McLaughlin @drdanmclaughlin]

Irish CPI inflation at 3.7% in April, from 2.2% a year ago. Energy prices were falling then but now up annual 15%, including 80% rise in home heating oil. Food price inflation still slowing though, to 2%, while air fares actually fell some 10% in April and down annual 18%.

[Daniel McLaughlin @drdanmclaughlin]

All Democratic governments are prisoners of economic performance and in the UK cumulative real growth over the past decade amounts to just 13%, or 1.2% per annum. Fiscal issues inevitable then, regardless of who is in No.10 or No.11. Can't please the electorate any of the time.

[Daniel McLaughlin @drdanmclaughlin]

The Irish economy is in recession on the GDP data, with the preliminary first quarter contraction of 2.0% following a 3.8% fall in the previous quarter. The prelim figure is often revised, and it can be substantial, but the export data shows the surge in early 2025 now unwinding.

[Daniel McLaughlin @drdanmclaughlin]

The Irish Govt has revised up its GDP outlook in the Spring forecasts, now 3.1% from 1.0%, although inflation now at 3.3% from 1.9%. The debt ratio falls to 31.2% of GDP. Forecast assumed $83 oil price and in severe alternative ($150) inflation averages 4.6% and 5.3% next year.

[Daniel McLaughlin @drdanmclaughlin]

IMF forecasts for Ireland look too optimistic. They see growth at 2.5% and inflation 3.1%. Latter may have a 4% handle and the big fall in exports reported of late means a contraction in GDP is more likely.

[Daniel McLaughlin @drdanmclaughlin]

Not always right but Polymarket showing big swing of late on odds the Democrats win the Senate in the November mid-terms, now at 56%. Late last year odds only 24%. Democratic control of House seen as odds- on for some time but now up at 86%.

[Daniel McLaughlin @drdanmclaughlin]

Home heating oil in Ireland rose by 68% in March, so contributing a third of the 1.6% rise in the CPI on the month. Diesel prices added another 0.4 percentage points. Annual inflation rose to 3.6% but food price inflation continued to slow, to 2.3%, the lowest in 15 months.

[Daniel McLaughlin @drdanmclaughlin]

Preliminary figures put Ireland's General Government debt in 2025 at €210bn, or 32.9% of GDP. Of the total some €138bn was in the form of Government bonds with the Central Bank currently owning €59bn as a result of QE. The net debt figure was €138bn or 21.6% of GDP.

[Daniel McLaughlin @drdanmclaughlin]

Note that the Brent oil future benchmark is moving to the June contract, which settles at the end of April and is lower ($107.50) than the previous May contract. The market still expects oil to fall in the months ahead, and December Brent is trading $85.

[Daniel McLaughlin @drdanmclaughlin]

Irish consumer prices rose by 1.8% in March on the flash estimate, with half the rise due to energy prices. The annual inflation rate rose to 3.6%. Food price inflation has slowed significantly, to 2.3% , but that trend likely to falter and reverse.

[Daniel McLaughlin @drdanmclaughlin]

@MarketBlondes yes but most CB models assume rational expectations and the economy returns to equilibrium quickly after shocks, hence initial reluctance to tighten in 2022.'Lessons learnt' to quote ECB so CBs now likely to tighten early and agressively.

[Daniel McLaughlin @drdanmclaughlin]

The ECB's baseline forecast looks redundant absent rapid fall in energy prices, as based on Oil at $81 (current $110) and Gas at €46( €62). Under adverse oil averages €119 with gas at €87, inflation is 3.5% this year instead of 2.6%. Severe case 4. % and 4.8% CPI next year.

[Daniel McLaughlin @drdanmclaughlin]

Irish household disposable income rose by 4.6% in 2025 to €186bn, with individual consumption rising at a similar pace to €161bn. Savings therefore rose by €25bn, leaving the savings ratio at 13.6%, broadly unchanged from the previous year and still well above pre-covid rates.

[Daniel McLaughlin @drdanmclaughlin]

The mean market price for a residential property sold in Ireland last year was €424,000 or 5.9 times the mean household disposable income of €71,700.

[Daniel McLaughlin @drdanmclaughlin]

The wholesale price of gasoline in Europe had crept higher in the last week of February and is currently 18% higher again so absent a sharp reversal Irish petrol prices could hit €1.80 a litre next week.

[Daniel McLaughlin @drdanmclaughlin]

'Overall, the ECB was currently in a good place from a monetary policy point of view' according to the Feb meeting account, although history now if current rise in energy prices is maintained for a period. More rapid monetary response likely than seen post energy spike in 2022.