• Economic picture has been robust in the face of geopolitical shcoks, but ongoing energy shocks brings risks to the outlook
• US economy continues to outperform, with Eurozone and UK dented by higher energy prices and policy uncertainty

The ECB’s Governing Council meeting for September saw the central bank raise its key interest rates by 25bps. The deposit and refi rates were increased to 2.50% and 2.65%, respectively. This was very much in line with expectations and was fully priced-in. It marks the second 25bps rate hike from the ECB this year. It previously increased rates by 25bps at its June meeting and then kept rates unchanged in July.

The manu. PMI edged slightly higher to 55.1 in July, amid sustained gains in output and new orders. Both input and output price inflation eased markedly in the month Traditional industrial production rose by 0.3% in Q2, but it was 5.2% lower in YoY terms 

The Federal Reserve Open Market Committee (FOMC) for July saw the central bank leave its key interest rate unchanged. The target range for the Fed funds rate was maintained at 3.50-3.75%, for a fifth consecutive meeting. The July meeting outcome was in line with market expectations. Nine of the twelve voting FOMC members were in favour of the “no-change” decision with three “hawkish” dissenters (Hammack, Kashkari and Logan), preferring a 25bps rate hike. Chair Warsh stated that there was an “active, robust discussion” within the FOMC on the policy outlook.

The Bank of England's Monetary Policy Committee (MPC) meeting for July saw the central bank leave the Bank Rate unchanged at 3.75%, as expected. This represents the fifth successive meeting where the central bank has been on hold.

Historic FX & Interest Rates for 2025

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. 

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.

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