News Archives - Page 4 of 567 - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

€10m paid out so far under €125m mortgage interest relief scheme

Just €10m has so far been paid out in mortgage interest relief under the Government scheme announced in the budget, despite €125m being allocated for it.

12,107 PAYE taxpayers have made a claim for the assistance, which is designed to help those who struggled with mortgage repayments last year because of rising interest rates.

Of these 11,832 have fully benefited from the credit and 11,050 of those received a refund of tax totalling €10m.

A further 919 taxpayers either had a balanced tax position or had an underpayment reduced through the use of the credit.

138 claimants were not in a position to benefit from the credit because they did not pay income tax in 2023.

While a further 137 claimants paid tax which was less than the full credit which they claimed.

There are around 707,000 mortgage holders in the State, but the number of people who may be entitled to claim the tax credit is not known.

The data was contained in an answer from the Minister for Finance to a series of parliamentary questions tabled by Sinn Féin’s finance spokesman, Pearse Doherty.

He described the scheme, which opened to applications in January, as “botched” because it is failing to support households struggling with soaring mortgage costs.

“The Government is failing households struggling with soaring interest costs,” he said.

“In less than two years, mortgage interest costs have increased by a massive 64%. Yesterday the Central Bank recorded a further 3% rise in early mortgage arrears in the last three months of 2023, driven primarily by vulture funds.

“This is clear evidence that workers and families are struggling with rising interest rates and the cost of living crisis. It is clear that the government’s botched mortgage interest tax credit is failing to support households.”

Mr Doherty added that among those who have not been able to access the relief are lone parent families that have seen their mortgage costs rise by thousands of euros.

“For over a year, Sinn Féin campaigned for the introduction of mortgage interest relief applied at source, which would have provided households with support of up to €1,500,” Mr Doherty said.

“If our proposals had been implemented, every struggling household would have received much needed support.”

“Instead, under this government, hundreds of thousands of households are facing no support whatsoever.”

The relief is available to homeowners who had an outstanding mortgage balance on their homes of between €80,000 and €500,000 at the end of last year.

Those who qualify receive relief at the standard rate of tax and this is based on the increase in the interest paid in 2023 over interest paid in 2022 up to a maximum of €1,250.

This equates to 20% of the maximum qualifying interest of €6,250.

However, in order to avail of the relief, taxpayers must file an income tax return for last year and upload their certificate of mortgage interest for 2022 and 2023, and confirmation of their mortgage balance at 31 December 2022.

They must also have paid income tax in 2023 and be compliant with Local Property Tax requirements.

Article Source – €10m paid out so far under €125m mortgage interest relief scheme – RTE

Copyright and Related Rights Act, 2000

Cabinet approves Bill to introduce pension auto-enrolment

Draft legislation designed to set up the new pension auto-enrolment system has been approved by the Cabinet.

If enacted, the Automatic Enrolment Retirement Savings System Bill will result in up to 800,000 private sector workers, who currently do not have a pension, becoming automatically enrolled in one.

The aim of the plan is to extend pension coverage across the working population, in order to ensure workers are properly financially prepared for retirement and not solely reliant on the State pension.

The scheme will use a similar model to the old Special Savings Incentive Accounts, with employees making a contribution, which is matched by their employer and topped up by the State.

Employer and employee contributions will start at 1.5% of gross salary for the first three years.

This will increase to 3% in year three to six, 4.5% in years six to nine and to the maximum contribution rate of 6% from year ten onwards.

The State will also make a contribution at a rate of €1 for every €3 saved by the employee.

In practice this means that for every €3 put in by a member, they will end up with €7 in their pot.

For a person earning the national average wage of just under €45,000 per year and saving continuously for 40 years at the full contribution rate of 6% of their gross pay, under the system they would end up with a savings pot of just under €750,000.

The plan has been the subject of discussion by successive Governments and the pensions sector for decades, but so far without delivery.

If the legislation which was brought to Cabinet today by Minister for Social Protection, Heather Humphreys, is passed it will pave the way for one of the biggest reforms of the pension system in the history of the State.

All employees not already in an occupational pension scheme and aged between 23 and 60 and earning over €20,000 across all of their employments will be automatically enrolled in the system.

Experience from other countries shows that once people are auto enrolled, very few people decide to leave the system.

However, it’s understood there will be provisions in the legislation to allow workers to opt out or suspend contributions should they wish to after a mandatory participation period of six months.

In circumstances where someone does opt-out or suspend their contributions, they will be automatically re-enrolled after two years.

But they will be able to opt-out or suspend participation again after a further six-months.

A new National Automatic Enrolment Retirement Savings Authority will be set up to manage the system, while commercial investment firms are tendering for the role of “registered provider” to invest contributions made by members.

Participants will be able to choose from a range of savings funds, including a default fund for anyone who prefers not to choose, as well as an alternative choice of funds for those who wish to be actively involved in investing their funds.

Drawdown of money in the funds will be aligned with the age of the State pension age, which will remain in place.

In recent months, employers have been expressing concern about the cost burden which auto-enrolment will place on them at a time when they are also facing a raft of additional labour costs.

Now approved by Cabinet, it is hoped that the bill will begin its passage through the Oireachtas after Easter.

It’s understood Heather Humphreys wants to have the Bill enacted as quickly as possible so that that the new system can commence and first contributions to AE can start on 1st January 2025.

However, some pension experts have expressed scepticism about the ability to deliver the system in that timeframe because it has been the subject of repeated delays.

The Government will also face a significant challenge in selling the project to workers, with research last year showing that seven in every 10 members of the public are unaware of it.

While research from the Central Statistics Office shows just one in five of those with no occupational pension from their current employment are aware of the plan.

Hilary Larkin, Head of Outsourcing at Mazars, said she believes that that the current timeline is “very optimistic”.

“At this stage, an implementation date of 1 January 2025 seems very optimistic given the level of infrastructure that needs to be put in place in order for the scheme to be operational,” she said.

“Once the bill is written into legislation the government will have to commence the tender process with investment companies. It is proposed that there will be a panel of four companies who will offer four schemes to employees (conservative, moderate risk, higher risk and a default).”

“The National Automatic Enrolment Retirement Savings Authority will also need to be established to administer the scheme. Once both are in place a clear communication strategy will need to be rolled out for employers by the government – the success of the scheme will depend on careful planning and a willingness to adapt based on feedback and evolving needs.”

Article Source – Cabinet approves Bill to introduce pension auto-enrolment – RTE

Copyright and Related Rights Act, 2000

Price increases in store for consumers from Monday

Inflation in Ireland has fallen significantly in recent months, but a number of cost increases will weigh on consumers from next Monday.

From midnight on 1 April, the cost of petrol, diesel and marked fuel oil (green diesel) will rise.

It is the latest step by Government to restore excise rates to the levels they were at before a temporary cut was introduced two years ago.

Filling up at the pumps on Monday will cost you an extra €0.04 cent per litre of petrol, 3 cent per litre of diesel and 1.5 cent on marked gas oil.

In March 2022, as fuel prices soared after the outbreak of war in Ukraine, then Minister for Finance Paschal Donohoe announced a steep reduction in excise.

The temporary cut immediately saved motorists 20 cent per litre of petrol and 15 cent on diesel. The reduction has been gradually unwound in the period since.

Monday’s increase will be the second last step, with one final increase to come in August. For consumers who are dependent on their private cars, it is bad news.

Since March last year, fuel prices have seesawed, and just when they are trending down again, the excise increase has fallen due.

Despite criticism of the move from opposition politicians and consumer groups in recent days, Government ministers signalled there would be no change to the planned excise restoration.

Aontú leader Peadar Tóibín said the the “idea of hiking up” excise duty is “absolutely wrong” and “punitive” on people.

He told RTÉ’s Morning Ireland that the Government is “raking it in” in terms of taxes on fuel and criticised its reason to restore excise duty “to change people’s behaviour”.

From Monday also, many consumers will see the cost of their broadband, mobile and television services increase substantially.

Eir, Vodafone, Sky Ireland and Three will all be increasing monthly prices on their plans, ranging from €2 to €8 depending on which provider and which plan is used. There will be increases coming later in the year for Virgin Media services too.

In the case of eir, Vodafone and Three, the increases will be brought about as a result of a clause in customer agreements that provides for annual increase in fees.

These companies will add 7.6%, a figure based on the consumer price index (CPI) in January of this year which was 4.6% and an additional 3% added on top.

In a statement to RTÉ News, eir said that like all telecommunications companies, it has experienced significant cost increases in recent years and “while these costs have been absorbed and managed where possible, it has been necessary to pass on some of these to customers”.

On its website, Vodafone says that the company is faced “with growing pressures due to inflation and increased demand to invest in our network so we can deliver reliable connectivity and the best customer experience possible.

“But these mid-contract price annual increases are new to the market in this country, having only been first used here in 2021.”

ComReg, which is the statutory regulator of the electronic communications sector, has expressed concern about such increases from a consumer protection perspective. However, it currently has no role in regulating prices.

Sinn Féin Spokesperson on Finance Pearse Doherty has strongly criticised mid-contract price increases and has called for Government action to outlaw them.

“We need to ban this practice, where companies are increasing the price of contracts in the middle of the contract,” he said.

“It’s already going to be banned in the North and in Britain. The regulator agrees with me that this practice has to stop and if the Government won’t act then we will act for them.”

Mr Doherty has produced legislation to ban the practice, which he will propose in the Dáil if the Government does not take action.

Article Source – Price increases in store for consumers from Monday – RTE

Copyright and Related Rights Act, 2000

Price increases in store for consumers from Monday

Inflation in Ireland has fallen significantly in recent months, but a number of cost increases will weigh on consumers from next Monday.

From midnight on 1 April, the cost of petrol, diesel and marked fuel oil (green diesel) will rise.

It is the latest step by Government to restore excise rates to the levels they were at before a temporary cut was introduced two years ago.

Filling up at the pumps on Monday will cost you an extra €0.04 cent per litre of petrol, 3 cent per litre of diesel and 1.5 cent on marked gas oil.

In March 2022, as fuel prices soared after the outbreak of war in Ukraine, then Minister for Finance Paschal Donohoe announced a steep reduction in excise.

The temporary cut immediately saved motorists 20 cent per litre of petrol and 15 cent on diesel. The reduction has been gradually unwound in the period since.

Monday’s increase will be the second last step, with one final increase to come in August. For consumers who are dependent on their private cars, it is bad news.

Since March last year, fuel prices have seesawed, and just when they are trending down again, the excise increase has fallen due.

Despite criticism of the move from opposition politicians and consumer groups in recent days, Government ministers signalled there would be no change to the planned excise restoration.

Aontú leader Peadar Tóibín said the the “idea of hiking up” excise duty is “absolutely wrong” and “punitive” on people.

He told RTÉ’s Morning Ireland that the Government is “raking it in” in terms of taxes on fuel and criticised its reason to restore excise duty “to change people’s behaviour”.

From Monday also, many consumers will see the cost of their broadband, mobile and television services increase substantially.

Eir, Vodafone, Sky Ireland and Three will all be increasing monthly prices on their plans, ranging from €2 to €8 depending on which provider and which plan is used. There will be increases coming later in the year for Virgin Media services too.

In the case of eir, Vodafone and Three, the increases will be brought about as a result of a clause in customer agreements that provides for annual increase in fees.

These companies will add 7.6%, a figure based on the consumer price index (CPI) in January of this year which was 4.6% and an additional 3% added on top.

In a statement to RTÉ News, eir said that like all telecommunications companies, it has experienced significant cost increases in recent years and “while these costs have been absorbed and managed where possible, it has been necessary to pass on some of these to customers”.

On its website, Vodafone says that the company is faced “with growing pressures due to inflation and increased demand to invest in our network so we can deliver reliable connectivity and the best customer experience possible.

“But these mid-contract price annual increases are new to the market in this country, having only been first used here in 2021.”

ComReg, which is the statutory regulator of the electronic communications sector, has expressed concern about such increases from a consumer protection perspective. However, it currently has no role in regulating prices.

Sinn Féin Spokesperson on Finance Pearse Doherty has strongly criticised mid-contract price increases and has called for Government action to outlaw them.

“We need to ban this practice, where companies are increasing the price of contracts in the middle of the contract,” he said.

“It’s already going to be banned in the North and in Britain. The regulator agrees with me that this practice has to stop and if the Government won’t act then we will act for them.”

Mr Doherty has produced legislation to ban the practice, which he will propose in the Dáil if the Government does not take action.

Article Source – Price increases in store for consumers from Monday – RTE

Copyright and Related Rights Act, 2000

Bill to introduce pension auto-enrolment scheme to go before Cabinet for approval

The Minister for Social Protection will seek Cabinet approval today for draft legislation designed to set up the new pension auto-enrolment system.

If enacted, the Automatic Enrolment Retirement Savings System Bill will result in up to 800,000 private sector workers, who currently do not have a pension, becoming automatically enrolled in one.

The aim of the plan is to extend pension coverage across the working population, in order to ensure workers are properly financially prepared for retirement and not solely reliant on the State pension.

The scheme will use a similar model to the old Special Savings Incentive Accounts, with employees making a contribution, which is matched by their employer and topped up by the State.

Employer and employee contributions will start at 1.5% of gross salary for the first three years.

This will increase to 3% in year three to six, 4.5% in years six to nine and to the maximum contribution rate of 6% from year ten onwards.

The State will also make a contribution at a rate of €1 for every €3 saved by the employee.

In practice this means that for every €3 put in by a member, they will end up with €7 in their pot.

For a person earning the national average wage of just under €45,000 per year and saving continuously for 40 years at the full contribution rate of 6% of their gross pay, under the system they would end up with a savings pot of just under €750,000.

The plan has been the subject of discussion by successive Governments and the pensions sector for decades, but so far without delivery.

If the legislation being brought to Cabinet by minister Heather Humphreys is passed, it will pave the way for one of the biggest reforms of the pension system in the history of the State.

All employees not already in an occupational pension scheme and aged between 23 and 60 and earning over €20,000 across all of their employments will be automatically enrolled in the system.

Experience from other countries shows that once people are auto enrolled, very few people decide to leave the system.

However, it’s understood there will be provisions in the legislation to allow workers to opt out or suspend contributions should they wish to after a mandatory participation period of six months.

In circumstances where someone does opt-out or suspend their contributions, they will be automatically re-enrolled after two years.

But they will be able to opt-out or suspend participation again after a further six-months.

A new National Automatic Enrolment Retirement Savings Authority will be set up to manage the system, while commercial investment firms are tendering for the role of “registered provider” to invest contributions made by members.

Participants will be able to choose from a range of savings funds, including a default fund for anyone who prefers not to choose, as well as an alternative choice of funds for those who wish to be actively involved in investing their funds.

Drawdown of money in the funds will be aligned with the age of the State pension age, which will remain in place.

In recent months, employers have been expressing concern about the cost burden which auto-enrolment will place on them at a time when they are also facing a raft of additional labour costs.

Once approved by Cabinet , it is hoped that the bill will begin its passage through the Oireachtas after Easter.

It’s understood Heather Humphreys wants to have the Bill enacted as quickly as possible so that that the new system can commence and first contributions to AE can start on 1st January 2025.

However, some pension experts have expressed scepticism about the ability to deliver the system in that timeframe because it has been the subject of repeated delays.

The Government will also face a significant challenge in selling the project to workers, with research last year showing that seven in every 10 members of the public are unaware of it.

While research from the Central Statistics Office shows just one in five of those with no occupational pension from their current employment are aware of the plan.

Article Source – Bill to introduce pension auto-enrolment scheme to go before Cabinet for approval – RTE

Copyright and Related Rights Act, 2000

Record levels of first-time mortgages approved in Feb

Mortgage approvals for first-time buyers hit a record annualised high in February.

Figures from Banking and Payments Federation of Ireland (BPFI) show that in the year to the end of last month, first time buyers were given the green light for mortgages worth a total of almost €9 billion.

During the month itself, 3,582 mortgages were approved, up 9.8% on January and 6% versus the same month a year ago.

First time buyers made up nearly 61% of that and mover purchasers accounted for 19%.

The total value of the mortgages approved during the month was just over €1 billion, up 10% on January and 7% on February of 2023.

First time purchasers accounted for 63% of that and mover purchasers for 22%.

“Our latest report shows that the mortgage market regained positive momentum in February with 6% year-on-year growth in mortgage approval volumes and 7% year-on-year growth in approval values,” said Brian Hayes, chief executive of BPFI.

“First-time buyers continued to drive the market, with 2,171 FTB mortgages approved in February valued at €640m, a jump of 14.7% and 19.8% year on year in volume and value terms and the highest February levels since the data series began in 2011,” he said.

Mr Hayes added that 12,355 Help to Buy applications were made to the Revenue Commissioners in the first two months of the year, indicating strong ongoing demand from first time buyers.

“By contrast, we seen a continued decrease in mover purchase volumes, which dropped by 8.4% year on year to 695, the lowest February level since 2016,” he stated.

“This has ongoing implications for the supply of second hand homes to the market which has being slowing down in recent months and the Central Statistics Office reported a 6% year on year drop in household purchases of existing homes in January.”

The data also shows that re-mortgaging or switching activity rose by 0.5% in volume terms year-on-year and fell by 10.7% in value in the same period.

Article Source – Record levels of first-time mortgages approved in Feb – RTE

Copyright and Related Rights Act, 2000

ESRI forecasts return to growth in household incomes this year as inflation falls

The ESRI has upgraded its outlook for economic growth this year, amid falling inflation, an expected normalisation of exports and moderate expansion of the domestic economy.

In its Quarterly Economic Commentary, the institute forecasts that the domestic economy as measured by Modified Domestic Demand will grow by 2.3% in 2024, up from its prediction of 2% in December, and will expand by 2.5% next year.

The think-tank also estimates that the economy, as measured by Gross Domestic Product, will expand by 2.5% this year, up from 2.3% in its last prediction, fuelled by faster than expected disinflation, the likelihood of interest rates falling later this year and a strong labour market.

However, GDP growth is forecast to ease slightly back to 2.3% in 2025.

“Unlike 2023, we expect all major indicators of economic activity to register positive growth in 2024 and 2025 indicating likely stable growth over the period,” said Professor Kieran McQuinn of the ESRI, who is a co-author of the report.

The institute thinks that exports will grow by 3.3% this year, marginally stronger than it previously thought, while private consumer spending will continue to be robust, expanding by 2.5%.

Public spending will also be stronger than the ESRI estimated in December, growing by 1.2% this year.

The analysis also details how the labour market is likely to continue performing at levels that are close to its capacity, with unemployment set to average out at 4.3% for this year and 4.2% next year.

Consumer prices will continue falling as energy costs soften, the research also suggests, with inflation set to average out at 2.3% across the year, lower than the 2.9% that the ESRI had forecast in December.

The ESRI says the reducing inflation outlook will lead to a return to growth in real incomes, which could grow by around 2.2%.

“Consumer prices have increased very rapidly over the past number of years, creating notable challenges for many households,” said the ESRI’s Dr Conor O’Toole, co-author of the report.

“However, we expect prices to rise at a much more modest pace for 2024 and 2025.”

In relation to the public finances, the ESRI expects the position to continue to be strong, with growth in income tax and VAT and levels of corporation tax remaining high.

However, ahead of the start of the budgetary cycle it has warned that the Government will face a balancing act in terms of investing what is needed in infrastructure without overheating the economy.

“The challenge is how do you bring about that investment in an economy that is growing as strongly and as robustly as the Irish economy is,” said Kieran McQuinn.

“And I think in that context you have be very careful what you do as far as taxation and cuts in personal taxation and cuts in taxation rates generally.”

He said the ESRI has always argued there can be adjustments in the taxation system, but overall that taxation package should be “pretty much neutral”.

“And one could argue maybe even contractual, you may even need to take some money out of the economy going forward given how robustly it is performing, given that you are going to be putting money in other areas of the economy, particularly through hiking investment levels,” he added.

But the ESRI also warns that there are a number of challenges which could impact the local and global economy.

These include ongoing geopolitical tensions in the Middle East and Ukraine which could affect trade.

It also highlights bottlenecks in infrastructure, given that the economy is close to capacity.

Fluctuations in activity in the multinational sector are also a risk to growth, it claims.

“Internationally, growth rates are stabilising and disinflation is occurring somewhat more quickly than expected,” the report states.

“If these conditions continue, it is likely to allow monetary authorities space to moderate official policy rates.”

“However, geopolitical tensions and their impact on global trade flows add notable downside risk.”

In relation to housing the ESRI expects around 33,000 new homes to be completed this year, which Mr McQuinn described as “a little bit disappointing” given that was the figure of completions last year.

“It is still clear that we need to build more housing units than we are at present,” he said.

He added though that a moderate increase is expected next year.

The report also highlights that there is an under-occupancy rate of 67% in housing in Ireland, putting Ireland in the top three in Europe.

In cities, the under occupation rate is 58.7% which is one of the highest in Europe, it says.

It also outlines how 73% of dwellings in Ireland have more than two bedrooms and Ireland has a comparatively high share of houses and small share of apartments, making it difficult for those who want to adapt their housing to their stage of life.

Article Source – ESRI forecasts return to growth in household incomes this year as inflation falls – RTE

Copyright and Related Rights Act, 2000

Credit unions main lender for personal loans – research

Overall non-performing consumer loans at banks and credit unions remain near recent historical lows, despite a slight increase observed in new early arrears cases.

That is according to a new analysis of the consumer credit market by the Central Bank, which also found that consumer debt servicing costs have not increased significantly since the ECB started to raise interest rates in July 2022.

The research also found that the pass through of interest rate increases to new consumer loan rates has been more muted in Ireland than elsewhere in the euro area.

While key ECB interest rates increased by 4.5% over the 18 months to the end of last December, average interest rates on outstanding consumer credit increased by only 23 basis points.

The paper, by Edward Gaffney and Paul Lyons, explains that the non-mortgage consumer credit market represents just over one-tenth of all household credit in Ireland.

It finds that consumer credit has trended upwards since 2016, within a context of overall deleveraging in the household sector.

It also outlines how consumer credit is characterised by smaller amounts, with the mean consumer loan borrower typically having an average outstanding balance of around €7,500 in December of last year.

€10.8 billion was owed on personal loans, €4.8 billion on asset finance and €2.2 billion on cards and overdrafts at the end of December last year.

Consumer credit also has more diverse purposes and a broader range of lenders than the mortgage market, the paper claims.

It finds that while banks continue to have a large share of outstanding consumer credit, credit unions, collectively, are the main lender for personal loan products.

A large, stable share of lending also originates from other non-bank financial intermediaries.

Among personal loans, €6.3 billion of outstanding credit is owed to credit unions, with €3.2 billion owed to main retail banks and €1.3 billion to other providers.

The most common purposes for consumer credit are spending on cars, including through Personal Contract Plans, Hire Purchase agreements and personal loans, as well as for home improvements.

At four major consumer lenders, one-third of consumer credit drawn down between 2020 and 2023 was to finance motor vehicles, and a further one-third was for home improvements.

The research explains that the consumer credit market may be associated with greater risk of default than mortgage markets, because the credit is unsecured and distributed across a wider range of borrowers.

The authors outline how indebtedness among Irish households peaked prior to the financial crisis of 2008 and last year outstanding household credit was approximately one-third below the peak in euro value terms, and even lower in per capita terms.

But consumer credit amounts have been increasing since 2016.

Kevin Johnson, CEO of the Credit Union Development Association (CUDA), said it was no surprise to the credit union movement that they are the main lender for personal loan products.

“Credit union lending rates are particularly competitive as they are not impacted by elevated ECB rates,” he said.

“Credit unions are also very must trusted by consumers – in 2023, they topped the table for the best customer experience (the CX Customer Experience report) in Ireland for nine years running,” he added.

Mr Johnson added that it is interesting the research finds that demand for consumer credit has remained strong, despite the ECB starting to raise interest rates in 2022.

“The report also shows that the pass through of interest rate increases to new consumer loan rates has been more muted in Ireland than elsewhere in the euro area and we believe that the predominance of credit unions in the personal loan market is one of the main reasons for this,” he said.

Article Source – Credit unions main lender for personal loans – research – RTE

Copyright and Related Rights Act, 2000

ECB confident wage growth slowdown on track – Lane

The European Central Bank is increasingly confident that wage growth is slowing back toward more normal levels, potentially opening the door to rate cuts, ECB chief economist Philip Lane said in a podcast published today.

The ECB has long pointed to rapid wage growth as a source of concern and said that cutting rates from record highs becomes possible once data starts showing the long-forecast moderation in wage demands.

“It’s desirable and inescapable that we do have several years of wage increases above a normal level,” Professor Lane said. “But what we need to make sure it returns to normal.”

“I would say we’re confident that it’s on track,” he added.

Professor Lane said that once the ECB becomes more confident that wage growth is slowing and inflation is indeed heading back to the 2% target as projected, it can start discussing rate cuts.

“If this assessment is confirmed, then we will start looking more closely at reversing some of the rate increases we’ve made,” he said.

Markets now see 90 basis points of rate cuts this year with the first move expected either in June or July.

Article Source – ECB confident wage growth slowdown on track – Lane – RTE

Copyright and Related Rights Act, 2000

Consumer sentiment falls in March amid ongoing caution

Consumer sentiment dropped again this month, new research has found, amid ongoing caution and concern.

The Credit Union Consumer Sentiment Index found rising living costs and another increase in fuel prices are weighing on spending plans.

Sentiment fell to 69.5 in March, from 70.2 in February, which in turn was lower than January.

The report’s author, Austin Hughes, said the broad message of the survey is that while it may no longer be the worst of times, it is still far from the best of times.

“Upward pressure on living costs may have eased but hasn’t reversed and the economic outlook remains extremely uncertain,” he said.

“The gradual if uneven fading of negative factors on consumer confidence is not translating into the emergence of strong positive developments in terms of the economic and financial conditions now being experienced by Irish consumers.”

Mr Hughes said the “holding pattern” sense in March was mirrored in other countries, including the US, the eurozone and the UK.

“A common ingredient in sentiment indicators globally at present appears to be an element of relief that energy-led price pressures are easing but this is offset by continuing strains on spending power and ongoing concerns about the economic outlook,” he said.

“As a result, a widely seen improvement in consumer confidence measures at the start of the year appears to have stalled as consumers wait for clearer evidence that a sustainable improvement in their circumstances is at hand.”

Four out of five elements of the survey weakened in the month, with the outlook for jobs the only one to buck the trend.

The largest monthly decline came in consumer thinking on the way their own financial circumstances had evolved over the past year.

The survey also asked special questions this month around home improvements and found two out of three Irish consumers undertook some form of spending on home improvements in the past two years.

37% say they undertook significant work compared to 25% who say their focus was on ‘refreshing’ their home by painting and decorating.

Spend on home improvements was positively correlated with income and negatively correlated with difficulty in making ends meet.

Male respondents were also more likely to say they had undertaken significant home improvement spend than females.

However, 30% of Irish consumers say they didn’t undertake any home improvement spend in the past two years.

45% of respondents are undertaking home improvements using their savings, while one in four say they will finance their home improvement spend from their current incomes.

Article Source – Consumer sentiment falls in March amid ongoing caution – RTE

Copyright and Related Rights Act, 2000