Historic FX & Interest Rates for 2025

The manu. PMI eased to 52.2 in Dec. Output and new orders expanded, albeit at a slower pace. Business expectations remained optimistic but the level of confidence fell slightly Traditional industrial production rose by 7.0% in the 3mths to Nov, and it was 4.4% higher YoY

The December meeting of the ECB’s Governing Council saw the central bank leave interest rates on hold. This was the fourth successive meeting that the central bank left its official rates unaltered. The deposit and refi rates were maintained at 2.00% and 2.15%, respectively. The ‘unchanged rates’ outcome was very much in line with market expectations.

The December meeting of the Bank of England’s Monetary Policy Committee (MPC) saw the central bank lower the Bank Rate to 3.75%. The decision was very much in line with market expectations. Once again, there was no unanimity within the MPC on its policy decision, and if anything, the committee appears to be even more split then it was before. 

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. 

Global economy has proven to be robust in 2025 despite ongoing geopolitical uncertainty.US growth increasingly imbalanced toward AI investment, with the consumer and labour market weakening. Fed and Bank of England set for further cuts as the ECB sits on the sidelines. Bank of Japan pivoting towards a hawkish stance. Dollar set for weakest year since early 2000s but currency has regained some lost ground during Q4 2025 and further modest upside for euro, while sterling could remain on the defensive amid a challenging macro environment.

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 first Federal Reserve Open Market Committee (FOMC) meeting of 2026 saw the central bank leave interest rates unchanged. The target range for the Fed funds rate was maintained at 3.50–3.75%. The decision to leave rates unaltered was very much in line with market expectations. There were two dovish dissenters at the January FOMC (Miran and Waller), who voted for a 25bps rate cut. The most recent rate change from the Fed occurred at its previous meeting in December, when it cut by 25bps. This represented the third 25bps rate cut of the year. So far, in its current easing cycle, which began in September 2024, the Fed has cut rates by a total of 175%.

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