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.

The service. PMI fell to 52.8 in April, consistent with the slowest pace of expansion in the sector since Jan 2024. This was reflected in a slowdown in new business. Both input and prices charged inflation eased somewhat. Mortgage approvals rose by 3.4% in Q1. Overall, 43.6k approvals were registered over the past year.

The Bank of England’s Monetary Policy Committee (MPC) meeting for may saw the central bank cut the Bank rate by 25bps two 4.25% marking its second rate reduction this year (previously cut at February MPC). Futures contracts in the lead up to today's meeting had 25bps rate cut fully priced in once again there was no unanimity within the MPC on its decision to cut rates today the voting breakdown showed an 5:4 split. 

As expected the May meeting of the US Federal Reserve Open Market Committee (FOMC) saw the central bank, once again leave policy on hold. The target range for the Fed funds rate was maintained at 4.25%-4.50% for a third consecutive meeting the decision by the FOMC to leave rates unchanged was unanimous. The most recent rate changes from the feds occurred over its final three meetings of 2024 when it reduced rates by a total of 100bps.

President Trump’s tariffs have unwound decades of global trade liberalisation, jolting markets and leading to revisions in global growth forecasts.The ultimate impact of the tariffs remains unclear given the volatility of US trade policy announcements. Most forecasters expect the greatest hit to be on the US domestic economy. Central bank outlook clouded by trade policy uncertainty.

The April meeting of the ECB Governing Council saw he central bank cut interest rates for a third consecutive time this year. It reduced them by 25bps, with the Deposit rate lowered to 2.25%. while the Re-fi rate was decreased to 2.40%. This marked the seventh 25bps rate cut since the ECB  started its easing cycle in June 2024. The changes to the official interest rates were in line with the market expectations. 

Historic FX & Interest Rates for 2024 ....

Renewed momentum in Irish residential property prices...

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