In this week’s public policy bulletin we take a look at the latest interest rate hikes from the ECB. We also review the CSO’s unemployment rate estimates for April 2023 as well as an assessment of Ireland’s competitiveness from the National Competitiveness and Productivity Council. In addition, we report on a series of anti-corruption measures proposed this week by the European Commission.
ECB hikes interest rates for seventh time in less than a year
The European Central Bank this week raised interest rates by an additional 25 basis points to 3.25 percent. Making the announcement, the bank’s governing council warned that “the inflation outlook continues to be too high for too long” and that “future decisions will ensure that the policy rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to the 2 percent medium-term target”. This week’s rate increase marks the seventh such increase in less than a year with the bank now signalling that further rate increases are likely in the face of growing wage and price pressures across the Euro area.
Rate of unemployment falls to match previous record low of 3.9 precent
The CSO this week released its Monthly Unemployment Estimates results for April 2023. According to the estimates, the country's unemployment rate fell to 3.9 percent in April – down from a revised rate of 4 percent a month earlier. Noting a decrease of 15,200 in the seasonally adjusted number of persons unemployed in April 2023 when compared with a year earlier, there were approximately 108,200 persons unemployed in the State last month. The unemployment rate was last at 3.9 percent between October 2000 and April 2001. You can read the full results of the publication here.
Housing supply the most serious problem undermining Ireland’s competitiveness – report
The National Competitiveness and Productivity Council (NCPC) this week published its 2023 Competitive Scorecard Report in which it found that housing supply is the most serious problem undermining the State’s competitive performance. The report specifically notes that in 2021, Ireland was the poorest performer in western Europe in terms of housing investment and that such constraints ultimately pose a risk to the State’s overall employment and living standards. In addition, while noting that overall Ireland’s macroeconomic fundamentals are strong, the report goes on to highlight how “there remain important areas for improvement if Ireland is to maintain, or improve upon, its competitiveness position in the years ahead” including improved efforts on meeting environmental targets and tackling price levels. The NCPC reports to the Government on key competitiveness and productivity challenges facing the Irish economy.
European Commission puts forward new anti-corruption package
This week the European Commission proposed a broad anti-corruption package consisting of a new Directive on fighting corruption and an expansion of the Common Foreign and Security Policy (CFSP) toolbox of restrictive measures (sanctions) to cover serious acts of corruption. According to the Commission, the aim of the new proposals is to integrate the prevention of corruption into the design of EU policies and programs, and actively support Member States' work to put in place strong anti-corruption policies and legislation. The package specifically includes new and strengthened rules criminalising corruption offences and harmonising penalties across the EU, as well as a proposal from the High Representative, supported by the Commission, to establish a dedicated Common Foreign and Security Policy (CFSP) sanctions regime to target serious acts of corruption worldwide.
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