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THE CENTRAL BANK has published its third quarterly bulletin in which it expects that the current inflation rate will see a “gradual and uneven” decline over the next two years.
The bulletin, which estimates and evaluates domestic economic activity each quarter, says that along with a slow decrease, the bank also anticipates “an upward pressure” on wages if the employment rate remains strong.
Under the current observations, the bank expects interests rates to fall to 3.2% and 2.3% in 2024 and 2025, respectively.
The estimate comes with the expectation that the price of energy, food and industrial goods will slow down, “offsetting more persistent upward pressure on inflation from services”.
The bulletin details that the current rate of inflation has already seen its peak, in mid-2022, and that the country is expected to “path back to lower rates of inflation” on a gradual and uneven basis.
The bank suggests that the current rate of headline inflation is largely impacted by “domestic factors”, such as the cost for services detailed previously, which it believes is “influencing” the current inflation rate.
Core inflation, which excludes the cost of energy and food, is expected to be more “persistent”, averaging 2.7% in 2025 based on current estimations made by the bank today.
June 2023 was the 23rd month in-a-row where the annual increase in the CPI has been at least 5%, according to the CSO. Core inflation currently sits at a rate of 6.6% in the last 10 months.
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The bank’s director of economics and statistics Robert Kelly said that while inflation is easing, its future path remains “sensitive” due to international economic activity and the “persistence of buoyant domestic demand”.
Employment and wages
On employment, the Central Bank’s bulletin expects that wages will begin to increase, and catch up to pre-2022 levels, due to pressures placed on employers from a high level of employment.
The bank anticipates this to happen based on current observations of the unemployment rate remaining close to 4%.
Current short-term employment rate (less than one year) compared to the long-term and overall rates. The Central Bank via CSO
The Central Bank via CSO
Currently, the long-term unemployment rate is close to a “historic low”, with the overall rate forecasted to average 4.3% for both this and next year.
Using data from the CSO, the bulletin determined that a 5.1% increase in average hourly earnings has created a 4.2% increase in this quarter, when compared to last.
While the bulletin details that public sector workers have seen the majority of these wage benefits, due to “public sector pay agreements”, it notes that the private sector has seen a 4.6% increase in earnings – the highest growth since the pandemic period.
It adds that, when compared to the second quarter of this year, the private sector has seen a small decrease (0.7%) in annual earnings. Finance and Public Admin saw the largest sectoral earning increases this quarter, of 2.6% and 2.3% respectively.
The bank notes that recent data from the Indeed job posting index insinuates that labour demand is slowing down, compared to the beginning of this year. This has been paired with a similar slowdown in “posted wage growth of 3.5 per cent in July, the lowest rate in fifteen months”.
Under current projections, the Central Bank estimates that the unemployment rate will reach 4.2% in 2025 forecasts.
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Yayyyyy paid out so to pay for some of the holidays to Spain yippee. I volunteer with a charity and within the next few weeks we’ll be inundated with calls for help for to pay for uniforms. I think the BOS allowance should be paid out differently not in cash but a credit note therefore the money is used for it’s intended purpose and not wazzed up again a wall on holidays or extensions or nails etc.
Surely the back of school allowance should be reduced now that there is free primary school books and that the tablets for the secondary schools have also been reduced due to this initiative?
I just feel sorry for all of the working dads who pay for all of the school fees as part of a maintenance agreement and don’t get the benefit of any of this money back from their taxes because it all is paid to the mother.
@Fiona Wyse: are you a parent do you know the cost of. Uniforms fleeces jumpers with crests on them. And only one s that benefit from the free school books is the principals . Still parents. Are asked /expected to pay. €80 +school fees. That is just primary school s and the secondary schools some of the schools that use the tablets parents pay for .
@Karen Marten: I’m very aware of the cost of them, my husband has purchased all his children’s tablets, books, uniforms and school fees without any governmental assistance. Two tablets in 2 years, €1,500 and all back to school allowance paid to ex wife. It’s ok for us, we plan and manage that cost between us (it’s tight and we work two jobs) but some men might not have the luxury of having a partner to fall back on and help financially. When there is a maintenance order in place it should go to the primary payer of the school kit, not the mother exclusively as that outlay is removed from them so why should they be paid the benefit. I look forward to your explanation on this one.
@Fiona Wyse some people need financial supports that’s why even those who have jobs. It’s called th cost of living I know what your problem is it’s crystal clear so obvious but I’m not going to get into that
@Karen Marten: I don’t agree, I am by anybody standards not a high earner, but if you pay your taxes, you have earned the benefit. Same for children’s allowance. Some can afford to put it straight into savings accounts, which doesn’t appear fair for alot of people, but they paid their taxes.
@Toyo Ke: I think you do agree. You both seem to be saying it shouldn’t be means tested. I also agree, if you pay your taxes you should get more than a free dental cleaning once a year.
@Toyo Ke: are you for real cop on . How many parents you know have applied for this both working or one working and one a carer getting turned down because earning. €50 too much .
@marklars81: I agree but if they don’t need it … don’t take it and. Child allowance has nothing to do with paying taxes any baby born In Ireland parent gets it… and children who’s parent is Irish who have moved back here.
Schools should be made pick colour of slacks/skirt and a colour of jumper/ polo shirt, all plain. Make uniforms actually affordable and let Pennys or Dunnes go for the market. Having to buy a crested jumper is just another way for a school to get more money from parents. Schools shouldn’t need to do this.
@marklars81: no schools should be making us pay for crested but they are . And are advertising for certain school uniform shops to buy them from but there are some options to go cheaper like getting crests done yourself or schools could go with iron on crests either but still.at and of day. Dunnes is not cheap when you have to buy polo’s shirts and the likes it still adds up .
@Karen Marten: Dunnes is cheap for school wear, you can get a pack of 3 polos from 5.50. Compare this to the school crested top and you’ll realise it is cheap.
Can’t really tell if you were agreeing or disagreeing with me to be fair :/
@marklars81: dunes is NOT CHEAP and polo s shirts blouses skirts trousers track bottoms all go up in price depending on age. So I am disagreeing with you that they are not cheap
So back to school allowance, paid meals in school, meals during summer holidays, Christmas bonus, is there anything these ‘parents’ actually get for their own children without relying on the state to raise their children?
I could never understand the qualifications for the Back to School allowance. I know of well qualified professionals working for large multinationals who get it. It is supposed to be biased on household income, yet the only way they would qualify is if the main breadwinners earnings are left out of the application…
@Mark R: I have heard from parents who applied but was over the means by €50 combined. Two parent working families struggling to get by with the costs of uniforms getting so expensive and schools making wear crested this and only black shoes and that’s just primary schools .
@Mark R: I can tell you with 100% certainty that no one who is in a well paid job is getting it unless they’re lying in their application, and if they are they will be found out because Revenue and the DSP share info.
@Gearoid MacEachaidh: yes I thought that too if a 2 parent working family struggling can’t get it earning too much ,but then again. There are some people who can work the system. Like the child allowance when not I’m the the country most of the year
@Karen Marten: the only way for these people to “work the system” would be to lie. There was a time where different government departments didn’t talk to each other but those days are gone. Only way to scam is to be getting paid under the table. But if you’re working for a multinational and claiming benefits you’re not entitled to you’ll be caught, and almost certainly wouldn’t get them to begin with since bank statements are required as part of the application
Stunned that a comment is mocking this payment as a means of garnering votes. I assume that if an alternative government is elected they expect the new government to remove all benefits to everybody. Some people are just ignorant in their need to protest against everything.
@Sun Rise: there are genuine hard working families who are over the means to get this payment and there are those who will always get it and not spend it on the uniforms let’s not sugar coat it !
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