Bank of Ireland predicts inflation will peak at 4% this year

Bank of Ireland expects inflation to peak at 4% this year as energy price surges but says AI-related investment is helping to buoy Irish GDP forecasts. Picture: Alamy

Bank of Ireland expects inflation to peak at 4% this year as energy price surges but says AI-related investment is helping to buoy Irish GDP forecasts. The bank has revised upwards its forecast for Irish GDP this year, though the lender still expects a 1.2% contraction in 2026, as the surge in exports in 2025 unwinds. It is predicting 3.1% growth in 2027. 

“Given the surge in oil and gas prices we expect CPI inflation to peak close to 4% at the turn of the year, another unwelcome squeeze on households’ spending power – which will be challenging – especially for those on low incomes," said Bank of Ireland group chief economist Conall Mac Coille.