Makhlouf backs rate pause as energy lifts inflation to 4 percent
Central Bank of Ireland Governor Gabriel Makhlouf backed holding rates unchanged as earlier tightening restrains demand. Speaking at Technological University Dublin, he cited October inflation of 4 percent in Ireland and the euro area.
Past tightening still working
Makhlouf supported the European Central Bank's (ECB) October rate hold despite upside inflation risks from the conflict involving Iran.
Two increases totaling 50 basis points since June were still passing through the economy, while higher government bond yields had independently tightened financing conditions.
October euro area core inflation was 2.5 percent; wage growth remained contained and inflation expectations anchored.
However, supply-chain effects and delayed wage adjustments warranted monitoring, with inflation projected to rise in early 2027.
He favored waiting for further data and December staff projections, including Ireland's Quarterly Bulletin.
Irish inflation had fallen from almost 10 percent in 2022 to around 2 percent by February 2026.
AI changes tasks before headcounts
One in seven Irish job adverts now mentions AI, almost four times the 2019 share.
AI appears in at least one in ten adverts across 21 of 41 occupations, versus three in 2019.
Makhlouf saw no consistent relationship between AI mentions and changes in hiring, or clear Irish evidence that AI was eliminating junior jobs.
Only one in five Irish enterprises used AI in 2025.
ECB staff estimate potential annual productivity gains of 0.2–0.4 percentage points over the coming decade, depending largely on adoption.
Lower inflation leaves higher bills
Makhlouf stressed that slower inflation does not reverse past price increases: Irish consumer prices were 26 percent above October 2019 levels in October 2026.
Renters face a different burden, with rents up 41 percent since 2019.
His policy message was targeted, tailored and temporary support, alongside infrastructure investment.
IN: