“I note the publication of the flash estimate for second quarter GDP. These data are initial estimates and more detailed information will be published in early-September.

“Today’s data show that GDP increased by 3.3 per cent in the second quarter, more than reversing the 2.8 per cent fall recorded in the first quarter of the year. The quarterly increase was largely due to increased output in the multinational sector.

“As I have stressed in the past, Modified Domestic Demand is a much better indicator of what is going on in the domestic economy and these data will be published just over a month from now. My department will then begin the process of producing its autumn forecasts that will underpin Budget 2024.

“That said, high frequency data suggest that the domestic economy performed reasonably well in the second quarter – consumer confidence strengthened, unemployment reached a record-low of 3.8 per cent in June and construction activity picked up.

“Inflation data also published today show that, as expected, consumer price inflation remains on a downward trajectory, with headline HICP inflation estimated at 4.6 per cent in July. Inflation of 4.6 per cent in July compares with a peak of 9.6 per cent in July of last year.

"As the fall in wholesale energy prices is passed-on at the retail level, we expect headline inflation to ease further in the months ahead.

“I am also conscious that core inflation – that is excluding energy and food prices – is still running at 5 per cent. This largely reflects the strength of the economy right now and the achievement of full employment. This is projected to ease, albeit at a somewhat slower pace than for headline inflation.”

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Notes