DAVY VIEW

Yesterday’s Irish Consumer Price Index (CPI) release showed inflation picking up to 1.3% in December. Excluding a temporary blip in April 2019, this is its strongest pace since 2012, driven up by a 3% rise in services prices – itself reflecting the pick-up in wage growth to 3.4%. This means price pressures will eat more into Irish households’ real incomes in 2020. Residential rent inflation slowed to 4.3% in December, the slowest pace since 2013.