DAVY VIEW

This morning’s Services Purchasing Managers’ Index (PMI) picking up to 54.1 in January is very encouraging, consistent with our view that the Irish economy should be more resilient than its peers. The flash euro area (50.7) and UK (48.0) Services PMI readings painted a far more challenging picture. Also, January’s exchequer returns showed a healthy 12.2% growth in tax receipts. The highlight was value-added tax (VAT) receipts up 18.5% on the year, suggesting consumer spending has held up despite the pressure of energy prices and elevated CPI inflation.