EU FINANCIALS: Bank of Ireland Group: 3Q25 IMS
Oct-29 08:41
(BKIR; A2/BBBpos/A-)
Small credit positive on NMII guidance upgrade.
- NII Guidance upgraded to €3.3bn in 2025. Other guidance maintained.
- Non-interest income in line with expectations (+5% YoY)
- Expenses in line with expectations (+3% YoY)
- CET1 ratio 16.2% (+0.2% QoQ) - doesn’t include -35bps expected from Motor Finance Provision impact.
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UK FISCAL: VAT increase impacts on fiscal, CPI, monetary policy (1/2)
Sep-29 08:40
- Chancellor Reeves seemed to commit a little more firmly against a VAT rise this morning in her Sky News interview (we will be watching closely her language at the Labour party conference where she is due to speak at midday - but probably with a more friendly audience).
- In terms of the fiscal revenues, the Treasury's illustrative effects of a change indicate that a 1ppt increase in VAT would raise GBP8.8bln in 2026/27, GBP9.2bln in 27/28 and GBP9.55bln in 28/29.
- As we noted last week, although the natural response is to think of VAT as a retail tax, it is much broader than that, also applying to hospitality and construction as well as across a number of other sectors.
- Looking at the impact on CPI, the standard rate of VAT is not paid on "essential" goods or household energy. It does apply to vehicular fuels (although this could be offset by a VED reduction) and also does apply to non-essential foods (confectionary, crisps, ice cream) as well as mineral waters and soft drinks.
- We estimate that around 60% of that CPI basket would be directly impacted by a VAT increase. So a 1ppt increase in VAT from 20% to 21% would increase headline inflation by around 0.5ppt if fully passed through.
- The last increase in VAT was implemented in January 2011 (2.5ppt increase from 17.5% to 20%). The timing of this - just after the Global Financial Crisis - makes it hard to use this as a basis for comparison (and VAT eligibility has changed somewhat since then too) but we note that Y/Y CPI rose from 3.26% in October 2010 to 4.35% by February 2011 (an increase of 1.09ppt), and continued to rise to a peak of 5.18% in September 2011.
MNI: UK AUG M4 MONEY SUPPLY +0.4% M/M, +3.4% Y/Y
Sep-29 08:30
- MNI: UK AUG M4 MONEY SUPPLY +0.4% M/M, +3.4% Y/Y
MNI: UK BOE AUG MORTGAGE APPROVALS 64,680
Sep-29 08:30
- MNI: UK BOE AUG MORTGAGE APPROVALS 64,680
- UK BOE AUG SECURED LENDING GBP4.31 BLN
- UK BOE AUG CONSUMER CREDIT GBP1.69 BLN
