Inflation across the euro zone will remain muted and below the European Central Bank's 2% target until 2020 according to the ECB's own forecasts. Across the Atlantic central bankers at the US Federal Reserve are seeing a similar picture - the economy is growing and nearing full employment, but there is not much upward pressure on prices. The annual inflation rate here, meanwhile, again at a time of strong growth in economic output and rising employment is a meek 0.5%. This all presents somewhat of a puzzling picture for economists.
Dr Micheál Collins, Assistant Professor of Social Policy at the School of Social Policy in University College Dublin, said that a low inflation environment sounds very good, but is particurlay unusual. Dr Collins said the current environment is part of the country's recovery story where we have seen the remarkable situation of no inflation for the past five years, with the inflation rate sitting close to or around 0%.
He said it has not been much different in other countries as well but is due to some short term factors, including the considerable weakness in the price of oil - which is unlikely to be sustainable. Ireland has also been impacted by a weak sterling effect which has keep consumer prices low, as well as a low wage environment which will also not last forever, he added.
The fact that inflation is flat will come as a surprise to some people as they ae experiencing sharp rises in the cost of living, including rising rents. Dr Collins said that averages overall are very difficult things and when we look into the details from the Central Statistics Office inflation figures, prices increases can be quite pronounced in certain areas. While mortgage costs are cheaper - as well as clothing and some food items - rents are seeing big increases, as are electricity and fuel costs. He said there is a big divide between house owners and renters. The latest census data showed that about a third of the population are renters, which means that a big porporation of the population are seeing pronounced increases in their living costs, he added.
MORNING BRIEFS - Aer Lingus has added two aircraft to its North Atlantic fleet as it looks to grow traffic on routes between Ireland and the US. In the short term, Aer Lingus will add extra flights to its Dublin Philadelphia and Dublin Seattle routes, both launched this year. Rival Ryanair, meanwhile, is expanding in the opposite direction and the airline is said to be targetting the Berlin slots previously owned by Aer Berlin.
*** The number of banking jobs set to leave the City of London due to Brexit may be significantly lower than previous estimates according to new analysis. Research conducted by the Financial Times suggests 4,600 bankers will leave London as they look to establish EU bases before the UK leaves the union. The Bank of England has predicted 10,000 jobs would be lost to London 'on day one' after Brexit, a figure echoed in research by consultants EY earlier this week. The FT research indicates the actual number may be much lower as the banking industry is more optimistic about the prospects for a free trade deal between the UK and the EU post Brexit.
*** A pre-Christmas thaw in the frosty relationship between Amazon and Google has developed as the retailer plans to resume stocking Google's chromecast device and other products. The two have been involved in low-level conflict that initially arose because Google devices did not support Amazon's prime video TV and film service. In response Amazon stopped selling Chromecast, which plugs into HDMI ports on TV screens and allows them to play content from a range of internet apps such as YouTube and Netflix. Google then pulled YouTube service from Amazon devices, apparently in retaliation. Amazon's move to re-stock the Google devices is being interpreted as an effort to de-escalate tension between the two.
*** Fashion retailer H&M has reported an unexpected drop in sales for the three month period from September to the end of November - down 4% compared to the same period last year to €50 billion.