Jim Power: Unclear whose interests Irish banks serve

I have believed for a long time a State-owned bank that supports small firms and start-ups is essential

The European Central Bank in Frankfurt, Germany. Economic activity, particularly in the services sector, the labour market, and core and headline inflation rates, will be the key focus of attention.

Sun, 30 Jul, 2023 - 14:01

Jim Power is a prominent Irish economist, consultant, and commentator known for his long-standing leadership roles and has authrored a number of landmark reports for key economic sectors.

The European Central Bank last Thursday delivered the latest rate increase, a year to the day since it commenced taking rates up in response to the inflation crisis, and its key interest rates have now risen by 4.25%. By any measure, that is a dramatic tightening.

Ahead of the next meeting in September, the ECB clearly has an open mind, and another 0.25% increase is certainly not a certainty. The ECB will be engaged in data-watching ahead of the September meeting. Economic activity, particularly in the services sector, the labour market, and core and headline inflation rates, will be the key focus of attention. While headline inflation is falling quite sharply, the core rate, which excludes volatile food and energy, is proving very stubborn.