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The Central Bank (pictured) published its third quarterly bulletin today. Alamy Stock Photo

Central Bank expects a 'gradual and uneven' decline to inflation over next two years

The Central Bank also anticipates wages will increase due to pressures from the employment rate.

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.

Currently, the rate of headline inflation is valued at 6.3% according to the latest Consumer Price Index by the Central Statistics Office.

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.

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%.

Longterm employment 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.

Currently, the employment rate is at its highest since records began in 1998.

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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    Mute Keyser Söze
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    Jun 12th 2025, 6:26 AM

    ESB made 700 million last year but needs to raise prices to invest in the network.

    140
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    Mute Nemethon
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    Jun 12th 2025, 6:29 AM

    @Keyser Söze: shareholders and directors come first but either way the bottom line will always be protected.

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    Mute Furious George - The Wasp
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    Jun 12th 2025, 6:46 AM

    @Keyser Söze: and what about all the profits from the other middlemen electric companies that do nothing only extract profit from the system. Needs to be nationalised along with all future renewable generation schemes that are not on private houses or businesses

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    Mute Paul O'Mahoney
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    Jun 12th 2025, 6:52 AM

    @Keyser Söze: And gave €189m to Exchequer, €1.8bn since 2014 , they are committed to 40% dividends to its shareholder ie the government.

    12
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    Mute Paul O'Mahoney
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    Jun 12th 2025, 6:55 AM

    @Furious George – The Wasp: ESB and grid are nationalised. All the other providers are here due to EU competition rules, some including SSE generate renewables.

    9
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    Mute Paul O'Mahoney
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    Jun 12th 2025, 6:56 AM

    @Nemethon: Share holder of ESB is us , ie the taxpayer.

    16
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    Mute Dominic Leleu
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    Jun 12th 2025, 7:37 AM

    @Keyser Söze: datacentres, electric vehicles and greed are the main responsible with the full complicity of our representatives, who by the way have expenses on the matter, so none of them would actually care

    14
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    Mute Geraldine Donoghue
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    Jun 12th 2025, 7:37 AM

    @Furious George – The Wasp: The ESB is nationalised. Over 96% is owned by the government and the rest is owned by an employees shareholding.

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    Mute Furious George - The Wasp
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    Jun 12th 2025, 7:42 AM

    @Geraldine Donoghue: I mean the private energy companies that buy electricity from the esb and then sell it at a mark up to the consumer. As for eu rules brininging in competition this is a fallacy. Electricity is a necessity it does not fit free market economics and because of it we have gone from some of the cheapest electricity prices in the 90s to the third most expensive in the eu. The energy companies serve no purpose only to extract profit from the system. If that profit went to the esb instead then that is what we would invest on the grid. Any increase by the esb is subsidising the profits of private, foreign owned energy companies. It’s wrong

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    Mute Paul O'Mahoney
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    Jun 12th 2025, 8:00 AM

    @Furious George – The Wasp: The price of electricity is linked to the wholesale price of gas that wasn’t present in the 90s. That’s the issue, if SSE generate electricity from wind the price is determined by the price of gas eventhough it didn’t use any. Competition is better than monopoly too.

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    Mute Geraldine Donoghue
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    Jun 12th 2025, 9:30 AM

    @Furious George – The Wasp: Do you not agree with competition then?

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    Mute Furious George - The Wasp
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    Jun 12th 2025, 10:02 AM

    @Geraldine Donoghue: no I don’t agree that competition between private companies delivers better public services. I have already outlined why regarding electricity. I do take the point that prices are set to the wholesale price of gas but that is in order to facilitate competition. When public services become privatised, services generally suffer. For example private healthcare using public hospitals to make profit while public patients wait on lists. We saw the issues in private nursing homes last week. Privatisation of trains in the UK has been a disaster as has its water supply. Private schools rely on the public purse to subsidise their excellent results while many do not admit SEN students like public schools are obliged to do in Ireland.

    9
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    Mute Furious George - The Wasp
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    Jun 12th 2025, 10:06 AM

    @Geraldine Donoghue: Private bus companies do not meet the standards required all over dublin on a daily basis. Relying on private enterprises to sort out the housing crisis that the private enterprises caused in the first place is my final example.Competition is a nice idea with supply and demand bringing price to an equilibrium but it only works in books. In reality , in Ireland, there is an insatiable greed amongst private companies across many industries. Our market is so small and so open to outside influences that public services are better left to be run not for profit. At least if the service isn’t the best , nobody is making profits off it.Private rents have increased 100% in Ireland in a decade. Whereas public housing haven’t. Public providing better service again, not at scale

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    Mute James Brennan
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    Jun 12th 2025, 11:38 AM

    @Geraldine Donoghue: electric ireland is the commercial side of the ESB business, purely for profit

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    Mute Geraldine Donoghue
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    Jun 12th 2025, 11:58 AM

    @James Brennan: Yes and all their profits go to their shareholders ie the government and a small amount to employees who hold shares.

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    Mute Geraldine Donoghue
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    Jun 12th 2025, 12:00 PM

    @Furious George – The Wasp: So just nationalise everything and let the taxpayer pay for it?

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    Mute Paul O'Mahoney
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    Jun 12th 2025, 12:28 PM

    @James Brennan: And yet it makes a loss

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    Mute Furious George - The Wasp
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    Jun 12th 2025, 12:29 PM

    @Geraldine Donoghue: no the end user pays for the electricity they use which is charged at the cost it is to produce. Just remove the profit out of the system. When it was completely public any profits were invested in the grid. Now private profits go to shareholders of energy companies wherever they live . I think this is wrong. The taxpayer paid for the grid in the first place . Now energy companies make massive profits of it. The customer loses out hand over fist. Unless your a data centre of course who get cheaper electricity rates.

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    Mute Geraldine Donoghue
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    Jun 12th 2025, 4:40 PM

    @Furious George – The Wasp: While I disagree with allowing so many data centres being built they do not get preferential treatment. They get the same deals as other large businesses. Should we get rid of all the private energy, transport, healthcare, nursing home providers etc. and just let the government run them. Good luck with that.

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    Mute Pauline Cahill
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    Jun 12th 2025, 9:26 AM

    As if 23 euro a year will make a difference where are the millions of money that was made or is that put away to add to the Exorbitant salaries that are paid to the CEO and the rest of them

    47
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    Mute grahem Emerson
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    Jun 12th 2025, 8:13 AM

    If supply and demand are the predictors of pricing when it comes to housing and everything else, what impact are data centre’s electricity use having on the overall price of electricity in Ireland? Has this been looked at?

    31
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    Mute Furious George - The Wasp
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    Jun 12th 2025, 10:08 AM

    @grahem Emerson: supply and demand only mentioned when it suits the government narrative. See my point above .
    Greed is also a intangible factor

    16
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    Mute PhiBo
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    Jun 12th 2025, 10:51 AM

    Dropping the VAT rate to 5% would help enormously.

    15
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    Mute Nicholas Grubb
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    Jun 12th 2025, 7:48 AM

    Any country with a lot of Subsidy Harvesting ( wind power) has very expensive electricity. This is because of the ” two cars in the driveway when you only need one” syndrome. Also gets our Climate account nowhere. People must start wondering why the cheapest power is in France and the UK have suddenly diverted 30% off their massive renewable support, to Small Modular Reactor development.
    The SMRs then feed the data complex. Then the waste heat of both goes to the 24/7/365, totally pesticide free growing and also the Fly, whose larvae then feed the fish and fowl, the feeding and offshore goings on with the former, being the biggest environmental horror story of the past forty years.

    13
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    Mute Phillip Smyth
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    Jun 12th 2025, 8:54 AM

    Winter customers are waiting with bated breath.

    11
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    Mute Padraig O'Brien
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    Jun 12th 2025, 3:57 PM

    I also agree with Pink Freud. It seems that the more we reduce our energy usage the more they jack up the add ons so that there is no saving to us to ensure no loss of revenue to them
    Like the deposit return scheme, and most things in this country, it’s a scam!

    12
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    Mute Ollie
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    Jun 12th 2025, 6:23 PM

    The increase in the needs for electricity is in large part being driven by the increase in the number of of data centres and now we the token eejits are suppose to subsidise big business yet again , where wealthy people with large remuneration are effectively being subsidised by the poor what a disaster of a nation that our ancestors fought for centuries to give us , hope you are proud

    5
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    Mute Pink Freud
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    Jun 12th 2025, 12:45 PM

    Shove yer PSO pittance up yer jacksie >shakes fist< …and take yeer extortionate Gas "Standing" Charges with ye!

    "Standing Charges" that never stand still from one month to the next. Absolute load of deceptive language b'l'x

    3 years running I have used NO GAS for 9 if not 12 months of the year.

    And even when usage is at absolute zero – the Standing Charge goes higher and higher and higher every single month. Skyrocketing to ludicrous prices that over a scorching *summer* stretch of 3-4 months (if not also a modest +2 months either side for Spring and Autumn) would easily match the cost of complete disconnection and reconnection.

    It is now, literally, far better value for money to sever your Gas Supply in March/April and re-install it in October/November (IF you could count on timely scheduling by Gas Networks. I haven't tried it yet, but strongly considering it!).

    How could I, or anyone for that matter, ever consider using the Gas ever again with these extortionate charges before you even begin to use Units fgs?

    I had been planning to switch over to entirely Electrical for Heating, in addition to Light, this coming Winter. With, possibly, stand-ins like Solar Charging/Battery Powered off-Grid Lighting to offset burden & costs on Leccie Bill….

    But since ESB has threatened us ALL with unwarranted and unjustified extortion as a consequence of damage-repair costs from both the Snow and the Wind Storm (even though that is precisely what we have ALL been paying our several decades of extortionate STANDING CHARGES for!!) – I don't see how Electricity can be a viable alternative to Gas this winter either.

    So. Back to the drawing board for me.
    If anyone has any other suggestions, I would very much welcome new ideas – other than investment in Photovoltaic Panels. Not solely because I cannot financially accommodate them now due to sustained rising prices on everything else. But mostly because I believe Rooftop *Vertical* WIND Power has far greater *year-round* efficiency and usefulness in a Country like Ireland . . . .yet for some bizarre reason, the State does not provide Renewable Energy Grants for Domestic-sized WIND Power.

    Obviously, though, like many on this island in new builds or apartments – we have been *denied* the fundamental Right of the Homosapien since the dawn of our Species' existence – to BURN fires within our homes for heat. So no Fireplace suggestions please. Fireplaces don't exist for most of us anymore. Although, BBQ-ing Cobblestones and bringing them into the house is not entirely nor definitely "off the menu" just yet.

    Nor is increasing the threat of burning the house down daily with unsupervised Candles – dotted everywhere for heat and light – bcoz, yennow, when a human finally reaches that perfect cozy temperature they do tend to uncontrollably nod off.
    But also – you can't reasonably expect ppl to go around knocking all the candles off just to go out to the shops – especially when trying to raise the whole-of-house Temperature by mere candle heat, can you?

    We'll all be reverting to bledy primitive caveman tactics in the 21st Century, soon enough, because of this delinquent Government AND Gas Networks and ESB thuggery on the Irish people…

    4
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    Mute Gareth Rice
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    Jun 12th 2025, 2:13 PM

    @Pink Freud: What a massive rant. The frightening thing is, I agree with everything you are saying.

    9
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    Mute Nicholas Grubb
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    Jun 12th 2025, 4:14 PM

    @Pink Freud: Wonder would there be a noise issue with the Vertical Wind units, if you are in town.? If you can at all have a wood burning stove, because there is going to be a massive amount of windblow and also dead & dying Ash available. If putting in a stove, make sure it has a private air supply to it, so it is not dragging cold air in every gap it can find in a window or door. Makes a massive difference.

    1
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    Mute Thesaltyurchin
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    Jun 12th 2025, 8:11 AM

    How much energy can a human produce? ; )

    2
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    Mute Paul O'Mahoney
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    Jun 12th 2025, 9:38 AM

    @Thesaltyurchin: Around here it’s universally negative.

    4
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