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Mortgage approvals continue to grow, driven by first-time buyers

New figures show that the number of mortgages approved were up 0.9% in April on a monthly basis, while they rose by over 98% compared with the same time last year.

Banking & Payments Federation Ireland said a total of 4,362 mortgages were approved in April.

First-time buyers (FTBs) were approved for 54.8% of the total volume of these new mortgages, while mover purchasers accounted for 22.2%.

Today’s figures also reveal that mortgages approved in April 2021 were valued at €1.089 billion.

FTBs accounted for €600 million of these loans and mover purchasers for €297 million.

The value of mortgage approvals rose by 2.4% month-on-month and by 107.5% year-on-year, BPFI said.

Brian Hayes, chief executive of BPFI said the data shows that April was another strong month for mortgage approvals, especially for FTBs.

“Compared with April last year, when the country was experiencing its first lockdown, there has been a doubling of activity across most mortgage categories during April 2021,” Mr Hayes said.

“It is important we look at the figures in the context of how different those two lockdowns have been and take into account how well lenders and customers have adapted in the intervening 12 months to working within Level 5 restrictions,” he added.

The annualised figures show there were 46,131 mortgage approvals in the twelve months ending April 2021, valued at €11.2 billion.

This is the highest value since the BPFI mortgage approvals data began in 2011.

“This was driven mainly by FTB approvals, which jumped to almost €6.2 billion in the twelve months ending April 2021, up 5.9% on the twelve months ending March 2021,” explained Mr Hayes.

“These trends point to a solid pipeline for drawdown activity later in the year,” he said.

Article Source – Mortgage approvals continue to grow, driven by first-time buyers – RTE – Gill Stedman

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Govt set to reduce PUP by €50 from September

The Government looks set to begin reducing the Pandemic Unemployment Payment by €50 a week from September.

It’s understood that Cabinet will consider reducing the PUP by €50 from the middle of September, with a further €50 cut set for mid November before the final €50 reduction in February next year.

The Government will also discuss taking students off the PUP from possibly 7 September as they return to third level education.

This would mark the beginning of the phasing out of emergency pandemic financial support.

From July, the payment will be closed off to new entrants under plans discussed within Government this evening.

It is understood the move has been agreed in principle by the Government parties and will now go to Cabinet for approval at meeting tomorrow morning.

The Taoiseach, the Tánaiste and the Green Party leader are meeting tonight to finalise the details of the Economic Recovery Plan, which will be published tomorrow.

The Wage Subsidy Scheme will continue during July, August and September and commercial rates will continue to be waived for these months also.

Earlier, Minister for Rural and Community Development Heather Humphreys has said the number of people claiming the Pandemic Unemployment Payment for the coming week has dropped to 309,000.

Ms Humphreys said the figure is now down approximately 100,000 since the economy began to partially reopen, and said it reflected the number of people who have gone back to work.

The minister said there would be more clarity on the phasing out of PUP payments when the cabinet meets tomorrow.

She said it is not sustainable to keep payments up in the long-term, but stressed that there will be no “cliff edge” announcement.

Ms Humphreys said it was unhelpful to speculate ahead of tomorrow’s decision, adding that she was conscious of how tough it has been for students who have lost their jobs and businesses that will not reopen.

She said there were a range of supports being put in place to help those people who have no jobs to return to.

The minister was speaking at the opening of the Swinford DigiWest hub in Mayo.

Yesterday, Tánaiste Leo Varadkar said that it was “too soon” to start reducing the amount which people are paid, adding that a lot of sectors would only be coming back around the middle of July.

“It will have to be phased out. It is not forever, but we want to phase it out at the right time when much more of the economy is open.”

Asked about reports that some hospitality staff are telling employers they will not return to work as they are better off on PUP, Mr Varadkar said there was not a lot of evidence to back that up – and that about “25,000 people a week” are coming off the payment.

He told RTÉ’s This Week that if a person refuses to take their job back, they lose their entitlement to PUP.

He said there was not an obligation on employers to inform the Department of Social Welfare if a worker refuses to come back to work, but “they can do it and there is a mechanism for that”.

He said they will be contacting everyone on the PUP to confirm if they are not able to return to work and “there is an obligation on them to tell the truth”.

Additional reporting Teresa Mannion

Article Source – Govt set to reduce PUP by €50 from September – RTE – Mícheál Lehane

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Momentum in economy building, Bank of Ireland’s Economic Pulse shows

Bank of Ireland’s Economic Pulse came in at 89.5 in May – back above its pre-pandemic level – which bodes well for a pick-up in spending as public health restrictions are lifted.

Bank of Ireland said it had revised upwards its GDP growth forecast for 2021 to 5.8% from 5% in February.

The Economic Pulse combines the results of the Consumer and Business Pulses.

The May Pulse was 4.1 higher than last month and up 45.6 on a year ago when the country’s first strict Covid-19 restrictions were still in place.

Bank of Ireland said that with a further loosening of restrictions on social interactions in May, the resumption of inter-county travel, some sectors emerging from lockdown, the remainder of construction, personal services and non-essential retail (by appointment) returned during the May survey period and others getting ready for lift-off, the consumer and business mood brightened this month.

“Plenty of reopening optimism in our economic pulse data this month,” said Dr Loretta O’Sullivan, Group Chief Economist with Bank of Ireland.

“We also see other factors contributing to an improvement in the economy, things like the unwinding of the involuntary savings that many households built up during the crisis, and also the fact that the global economy has returned to growth so the combination of factors has led us to revise upwards our GDP forecast to 5.8%.”

The increase in opportunities to spend lifted household buying sentiment, while firms saw their order books improve.

The Business Pulse stood at 92.7 in May 2021, up 3.8 on last month’s reading and 51.3 higher than a year ago.

All four sectoral Pulses – Industry, Services, Retail and Construction – were firmer this month as the re-opening of the economy progresses.

But the May data also pointed to growing inflationary pressures, with 78% of construction firms, 67% of firms in industry and 48% of retailers reporting an increase in non-labour input costs in the past three months.

Bank of Ireland said this is mainly due to post-Brexit red tape, with rising global commodity prices also a factor for some.

It also cautioned that some impact for consumers also looks to be on the cards, with just over two thirds of builders and almost half of firms in industry and retail indicating that they expect to increase their selling prices in the near term.

At 76.7 in May 2021, the Consumer Pulse was up 5 points on last month and 22.8 higher than a year ago.

Bank of Ireland said that households upgraded their assessment of the economy and prospects for jobs this month as the easing of restrictions continued.

They were also more positive about their current finances and with the vaccine roll-out advancing, a third indicated that they expect to spend more on holidays this year compared with last year.

The Housing Pulse rose 4.3 in May 2021 to come in at 112.3, 87 higher than a year ago and the 13th consecutive monthly gain for the index.

Three quarters of households think house prices will increase over the next year as supply continues to trail a long way behind demand and the construction sector struggles with labour, material and equipment shortages.

On the rental front, expectations also tracked higher this month, with almost two thirds of survey respondents now anticipating rent increases over the coming year.

“But as this month’s Pulse surveys also show, post-Brexit trade frictions are adding to business costs and the potential spill-over to consumer prices from this and the unlocking of pent up demand will be something to watch out for as the year progresses,” Dr O’Sullivan cautioned.

“There is definitely an upward pressure around prices coming through in the data and we’ll also have to be looking carefully to see what potential spill overs there are to consumer prices coming from these additional business costs on the back of the post-Brexit red tape and also potentially from the pent up demand that we know is going to come from through in the next few months and how that impacts consumer prices.”

Article Source – Momentum in economy building, Bank of Ireland’s Economic Pulse shows – RTE

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Crypto assets a great concern, says Central Bank’s Rowland

The rising popularity of cryptocurrencies such as bitcoin is “of great concern” according to the Central Bank’s Derville Rowland.

“Crypto assets are quite a speculative, unregulated investment,” and people should be “really aware they could lose the whole of that investment,” the Central Bank’s Director General for Financial Conduct said in an interview with Bloomberg.

Derville Rowland joins a host of central bankers who have raised the alarm on crypto investments.

Bank of England Governor Andrew Bailey has warned cryptocurrencies have no intrinsic value and that people should only buy them if they’re prepared to lose their money.

Bank of Japan Governor Haruhiko Kuroda added his voice to the chorus of concern, noting Bitcoin’s “extraordinarily high” volatility. Bitcoin has risen about 30% year to date.

In July, Ms Rowland will take over as chair of the European Securities and Markets Authority (ESMA)’s investment management standing committee – the group which helps prepare regulations for the funds industry.

Her rise to prominence has been as the face of the Central Bank’s enforcement investigations.

The regulator has recently fined or is investigating most of Ireland’s retail banks for mortgage overcharging.

In March it fined Davy Stockbrokers for breaches that ultimately resulted in the resignations of the CEO and other executives.

That firm is now for sale as a result of the fallout.

Derville Rowland said at the time Davy “need only look in the mirror” when it “asks itself how things went so catastrophically wrong.”

Cryptocurrencies are not the only digital investments causing unease for regulators.

Attention is also focused on the so-called “gamification” of stock investing, which Rowland expects to become an issue for Europe soon.

Online brokerages such as Robinhood Markets have brought a slew of mom and pop investors into the US market and critics accuse them of turning trading into a social activity.

Readers of online platforms like Reddit have played havoc with shares of firms such as GameStop and AMC Entertainment Holdings and people could be exposed if they are effectively using message boards as a substitute for investment advice.

The European Securities and Markets Authority has held discussions on the issue, as well as the Central Bank, Rowland said.

While there is not yet a time-line for any new rules, regulations need to be “technology neutral,” she said, “so that you’re not getting better protections in older paper based processes then you are in more online processes”.

Derville Rowland has long been a champion of greater diversity in financial services, which she says could help improve regulation of the industry.

Decision making, risk control and performance are all improved with diversity, she told Bloomberg, adding that the industry has “has a very long way to travel.”

“The investment management sector is not diverse, and needs to work considerably harder on this topic. It’s something that we have brought to the attention of boards, and it’s something that is dear to my heart,” she added.

Article Source – Crypto assets a great concern, says Central Bank’s Rowland – RTE

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National Economic Plan to map out recovery plans

It is widely expected that the Cabinet will approve and publish the Government’s National Economic Plan next week.

This will outline policies to promote the recovery of the economy and chart its future path. It is part of the Programme for Government and was originally expected in October.

There was still a lot of uncertainty back then over where the pandemic and Brexit were leading us.

There still is a lot of uncertainty about but thankfully, a gradual path that takes account of both ongoing risks is emerging.

The plan is also expected to detail how the Government hopes to begin to reduce the extraordinary level of support to incomes and businesses as the pandemic recedes and the economy returns to normal.

The main focus of the plan will be to get people back to work. Official forecasts are for unemployment to remain at 16% this year before falling to 8% next year.

I understand the National Economic Plan will set an ambitious target of 2.5 million people in employment by 2023, which would mean more people in work than in 2019 – pre-pandemic.

There was a call for submissions on the Plan back in October when its main themes were outlined.

The Programme for Government also sketched out many of the priorities.

So, expect to hear more about “future proofing our economy and society” and an “inclusive and balanced recovery”.

This will translate into retrofitting homes and businesses to make them more energy efficient, retraining for future skills needs and supports for small and medium sized enterprises, in particular.

If the Government heeds the advice of the Irish Fiscal Council this week, the Plan won’t include a broad stimulus which would pump money into the economy.

The Council’s view is that the Government has already pumped in a huge amount of money through various supports and schemes.

It also believes that it’s already the case that consumers themselves are providing a boost and more will come as at least some of the savings built up during the pandemic are spent.

The pressing and persistent question also raised by IFAC this week, of how grand plans dovetail with budgetary arithmetic, probably won’t form part of next week’s announcements.

That will have to wait until the Department of Finance publishes its Summer Economic Statement next month. Any maybe not even then.

At this point, it’s perhaps useful to dust down the last time a medium term economic plan was published, back in December 2013.

“A Strategy for Growth” is a relatively unflashy document, printed up in a patriotic green typeface. It was published just after Ireland exited the bailout programme.

It forecast that unemployment would still be 8.7% by 2019 (it fell to just 5% that year) and that our level of national debt would be still be 98% of GDP (it fell to 57.4%).

The first and overriding priority in that plan was “ensuring debt sustainability”.

Both economic growth (even if GDP doesn’t capture what’s happening in the domestic economy and gives a rosier picture of our debt position than is probably the case) and growth in jobs turned out better than planned.

But no one back then considered Brexit or Covid-19 – two events which frame our current turning point.

Plans are a good starting point to figure out where we should be going next. But you can’t plan for everything.

Article Source – National Economic Plan to map out recovery plans – RTE – Robert Shortt

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Work-life balance top well-being concern for employers

A new survey has revealed that work-life balance is the number one well-being issue Irish employers are concerned about followed closely by mental health and burnout.

The 2021 Global Well-being Survey was carried out on behalf of Aon by global market research company IPSOS.

It found that 70% of employers in Ireland identified work-life balance as the top well-being risk currently facing their employees.

66% also identified mental health as a concern, while 45% said the current working environment was a concern and 39% said employee burnout was a worry.

However, the survey reveals that Irish companies are ahead of their international competitors in embracing employee well-being .

96% of businesses here have at least one employee well-being initiative in place compared to 86% of firms in Europe.

But only one in two firms have a comprehensive employee wellbeing strategy in place and the survey found that investment is the number one challenge for firms either looking to create an employee well-being strategy or expanding an existing programme.

This is compounded by the fact that 56% of businesses reported a lack of leadership focus as being the principal obstacle to prioritising well-being within their organisations.

87% of Irish companies surveyed agreed that the HR Director is the biggest supporter of wellbeing initiatives, followed by the CEO (76%).

Aon also said that improving employee well-being by 4% results in a 1% increase in company profit and a 1% decrease in employee turnover.

This comes as 47% of Irish businesses have identified attracting and retaining talent as the main factor negatively impacting their business compared to 31% who pointed towards adapting to changing customer needs due to Covid-19.

Ian Thornton, Managing Director of Health and Benefits at Aon in Ireland, said that the health and well-being of employees has been the number one priority of business leaders as they navigated the Covid pandemic.

“With the fundamental shift in where, how and when work gets done in recent months and the prevalence of a multigenerational workforce, employee wellbeing is more important than ever before,” Mr Thornton said.

But he said that well-being is so much more than an individual programme, adding that requires leadership support and buy-in to create a strategy and business culture that can positively impact employees and company performance.

“Over the coming months, business leaders will need to ensure there is no disconnect between the requirements of employees and the wellbeing supports available to them,” he said.

“As hybrid working becomes a way of life for many, companies will need to support the rapidly changing needs of employees – not just physical well-being, but increasingly, emotional well-being including addressing work-life balance and burnout challenges, as well as financial well-being,” he added.

Article Source – Work-life balance top well-being concern for employers – RTE

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ISME dissatisfied with non-vaccinated workers’ guidance

Small firms’ body ISME has accused the Government of exposing employers to potential legal action by failing to give them “robust” guidance on handling situations where employees choose not to be vaccinated.

In a letter to Tánaiste and Minister for Enterprise Trade and Employment Leo Varadkar, ISME Chief Executive Neil McDonnell acknowledges the “absolute” right of citizens to refuse vaccination.

However, he says some employers believe the Government’s latest Work Safely Protocol published two weeks ago does not address difficulties regarding unvaccinated staff – particularly in smaller enterprises.

The Work Safely Protocol states that a worker does not have to accept the offer of a vaccination.

However, if it is refused, the employer “…must review their risk assessment and decide whether the worker can carry out the work task without vaccination, and what other protective measures are needed”.

The Protocol continues: “There may be certain circumstances where it is deemed that an unvaccinated worker is not safe to perform certain work tasks and in such circumstances the employer may have no option but to redeploy the worker to another work task.

“This decision would need to be agreed between the employer and a medical practitioner in consultation with the worker.”

The Department of Enterprise Trade and Employment has confirmed there are no plans to make vaccination mandatory in Ireland.

It reiterated recent comments by Tánaiste Leo Varadkar that vaccine hesitancy has not really emerged as a problem in Ireland yet.

It also noted that the vaccination programme is continuing with over 2.5 million doses administered.

The Department described the Work Safely Protocol as offering “some initial guidance for employers”.

For example, “an employer might decide that somebody who is not vaccinated shouldn’t be in a customer facing role, perhaps they should be redeployed with agreement to another position within the organisation”.

The Tánaiste has said previously this will be expanded upon “as more of our population become vaccinated and this becomes an issue”.

However, ISME has cited reports from employers with smaller workplaces who are already anticipating difficulties because the capacity to redeploy unvaccinated staff – as recommended in the Work Safely Protocol – is “extremely limited”.

In some enterprises, Mr McDonnell says, certain employees have already communicated their intention not to be vaccinated, while others have voiced “personal safety concerns” about working close to unvaccinated colleagues or customers.

“The proximate issue is the fact that, in not providing for more robust guidance on the handling of unvaccinated employees in the workplace, the Department is unfairly exposing employers to the potential of enforcement action by either the HSA (in the absence of adequate measures) or the WRC (in the enforcement of measures),” he warns.

The ISME letter also raises the issue of the confidentiality of vaccination status, which an employer cannot request to be disclosed to them.

“In the case of those businesses where colleague-to-colleague or colleague-to-client proximity is essential, inevitable, or unavoidable, the employer must know the vaccination status of employees, and must be able to presume employees are unvaccinated in default.”

It continues: “It is well established that employers may request and hold information on employees which is of a confidential nature but they are not precluded from requesting it as it is a matter that is essential to their employment.

“The GDPR regulation also makes clear that the preservation of life takes primacy over privacy at any point where there is a conflict between the two,” Mr McDonnell writes.

ISME insists that where an employee exercises their right not to be vaccinated, the Work Safely Protocol must explicitly acknowledge that the duties of an employer under the Safety Health and Welfare at Work Act(which can result in the indictment of an employer), take precedence.

Mr McDonnell also argues that the Work Safely Protocol devised under the auspices of the Labour Employer Economic Forum “remains entirely compromised because it has been written with large companies only in mind”.

ISME is not a party to the Labour Employers Economic Forum – a fact which Mr McDonnell argues “fatally undermines” the Protocol.

Article Source – ISME dissatisfied with non-vaccinated workers’ guidance – RTE – Ingrid Miley

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Deadline for annual returns extended to 11 June

The Registrar of Companies has extended the deadline for the filing of annual returns to 11 June.

The Registrar said it has taken the decision to further extend the deadline, “in light of difficulties experienced by presenters in filing annual returns in the run up to the filing deadline.”

The CRO said it is continuing to work on resolving the issues experienced by some.

The Minister for Trade Promotion, Digital and Company Regulation, Robert Troy welcomed the decision.

“I welcome the decision by the Registrar to extend the filing deadline for Annual returns, in recognition of the difficulties being experienced by some businesses and their professional advisers in relation to filing obligations.

“This will give much needed breathing space for those who are currently experiencing difficulties and have not yet completed filing,” he said.

Article Source – Deadline for annual returns extended to 11 June – RTE

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European Union to finalise huge farm policy overhaul

European Union agriculture ministers said negotiators are close to a deal that aims to reform the bloc’s huge farming subsidy programme, protect small farms and bring agriculture in line with environmental goals.

The EU’s Common Agricultural Policy (CAP) will spend €387 billion – around a third of the EU’s 2021-2027 budget – on payments to farmers and support for rural development.

The new rules kick in from 2023.

Ministers from the 27 member states began two days of talks in Brussels yesterday, as negotiators from the European Parliament, member states and the European Commission try to end a nearly three-year struggle to reform the CAP.

The CAP reform aims to align agriculture with the EU’s green goals.

It wants to curb the 10% of EU greenhouse gases emitted from farming and reducing the pressure on natural habitats from intensive practices, including pesticide use and irrigation.

Negotiators are tussling over plans to spend between 20% and 30% of payments to farmers on schemes that protect the environment, such as organic farming or restoring wetlands to absorb CO2 from the atmosphere.

Environmental campaigners say the reforms lack firm targets – for example, to reduce greenhouse gas emissions – and would do little to reduce industrial farming.

The reforms will also attempt to halt the loss of Europe’s small farms, by stopping big businesses sucking up most of the money.

EU climate policy chief Frans Timmermans has said 80% of CAP payments go to 20% of the beneficiaries, with big landowners and agro-industry firms profiting while family farms “get the shortend of the stick”.

Proposals under discussion could cap the amount of cash that each recipient gets, or require countries to redistribute part of their CAP funds to smaller farmers.

Negotiators this week agreed to scrap a contentious plan that would have banned food companies from comparing plant-based products to dairy in their marketing, for example by labelling almond-based drinks as creamy.

Article Source – European Union to finalise huge farm policy overhaul – RTE

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54% of consumers plan summer holiday this year – KBC Bank Ireland

Irish consumers do not plan to go wild on their holiday spending in 2021, a new survey from KBC Bank Ireland suggests.

One in four plan to spend the same as in 2020 and while slightly more plan to spend more than to cut back (19% compared to 12%), the average outlay overall is likely to be broadly unchanged from last year.

KBC said this points to a “solid” rather than “spectacular” season for the domestic tourism industry overall this year.

The survey shows that 54% of consumers here plan to have a summer holiday in 2021 and a further 12% have yet to make up their minds.

But 19% of consumers say they are unable to afford a holiday this year.

KBC said that although this figure may appear high, it seems broadly consistent with the 22.4% Covid-adjusted unemployment rate for May in capturing a cohort facing significant financial uncertainty at present.

Another 15% say they will not go on holiday for other reasons with the vast majority of these citing Covid-related concerns.

The responses were given to a supplementary question asked in the KBC Bank Ireland’s May consumer sentiment survey.

As the survey showed a rise in consumer confidence to a 23 month high driven in large part by “opening-up” optimism, it might be expected that consumers would be notably keen on enjoying a summer break.

“However, the responses to the survey as a whole and to this special question suggest that a significant element of caution persists in general, and a substantial number of Irish consumers remain financially constrained or facing uncertain futures to the point where holidays are out of reach,” KBC Bank Ireland said.

Article Source – 54% of consumers plan summer holiday this year – KBC Bank Ireland – RTE

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