Midterm shock, 4% inflation and a legal-aid rebuke

Good morning. America has voted and Democrats are projected to take both chambers, while closer to home inflation is estimated at 4% and the High Court has rebuked the Government’s legal-aid rules. AIB, at least, is having a lovely quarter. Let's get into it.

1. Irish Services Prices Rise At Fastest Pace Since 2023. Irish service providers raised prices at their fastest rate since February 2023, according to AIB's latest PMI, as energy, fuel and wage costs climbed. Separately, the CSO estimates annual inflation reached 4% in October, up from 3.8% in September. Services activity continued growing, but business confidence fell to a six-month low. Companies are increasingly passing higher costs on to customers.

2. Squarespace Cuts Jobs But Keeps €70m Irish Investment. Website-building platform Squarespace is cutting 300 jobs globally, almost 20% of its workforce, with up to 25 Dublin roles potentially affected. Irish employees are entering consultation, although the company insists its planned €70m multi-year investment will continue. Its commitment to Ireland remains, but that does not guarantee every existing job.

3. High Court Finds Government Legal-Aid Rules 'Grossly Unfair'. The High Court has ruled that key provisions of Justice Minister Jim O'Callaghan's criminal legal-aid regime exceeded his powers, describing aspects as illogical and grossly unfair. The €520 flat-fee system had already triggered months of solicitor protests. Final orders remain outstanding, with the case returning on 10 November. The Government now faces a legal problem alongside its industrial dispute.

4. AIB Raises Guidance After Another Strong Quarter. AIB has upgraded its full-year net interest income forecast to above €3.85bn, with new lending up 17% to €12.3bn over nine months and customer deposits reaching €120.4bn. Green mortgages accounted for 61% of new mortgage lending. Operating costs rose 3% despite employee numbers falling by the same percentage, but the bank's overall performance remains strong.

5. Chinese Carmaker Geely Is Coming To Ireland. Chinese automotive giant Geely plans to begin selling cars in Ireland during the first quarter of 2027, with a Dublin headquarters expected to open this month. The manufacturer sold more than 3m vehicles globally last year, up 39%. Its arrival will increase competition for established Irish dealers as Chinese brands expand their European presence.

The US midterms have delivered a major setback for Donald Trump, with Democrats projected to take control of both the House and Senate, giving them substantial power to block legislation and scrutinise his administration. Wall Street futures fell as the results emerged, with Nasdaq futures dropping as much as 2.2% and S&P 500 futures down 1.3%. American trade policy could also be shifting, with Trump claiming a Canadian trade deal is close after months of reciprocal tariffs. Meanwhile, Oracle scrapped a reported $7bn AI-chip deal with Tencent following US Government pressure, and Australia raised interest rates to 4.85%, their highest since 2008, as inflation proves difficult to contain.

Finance & Markets

Markets are waiting on the US midterm count with AI shares in correction and oil still above $100, while Irish banks look like the quiet room in a noisy building.

The Nasdaq 100 is more than 10% below its October peak, though the Nasdaq Composite rose on Tuesday as chip stocks rebounded, and CoreWeave gained more than 5% despite being down about 41% over the month on AI financing worries. Brent settled at $103.60 a barrel. One analyst warns a strong Democratic showing could stoke AI regulation jitters, which is a forecast, not an outcome.

At home, the Iseq fell 0.45% to 14,353.34 on Tuesday, yet the banks keep delivering. AIB today lifted its 2026 net interest income guidance, the gap between what it earns on loans and pays on deposits, to above €3.85bn from €3.8bn. Gross loans are up €4bn since December to €76.3bn, and about €849m of a €1bn buyback is done. Bank of Ireland raised its own target above €3.5bn last Wednesday, and JP Morgan called Irish banks a haven in volatile markets. Analyst John Cronin cautions that Bawag, with a cost-to-income ratio of 29.8% against Bank of Ireland’s guided 52%, would raise the competitive bar if its PTSB purchase closes.

Industrials are paying for the same inflation. Smurfit Westrock cut 2026 adjusted EBITDA guidance to about $4.7bn on roughly $700m of extra freight and energy costs. CRH lowered its net income range to $3.1bn to $3.3bn, though it also announced a $6bn buyback through 2030.

In Thursday’s Tá, the Sector Spotlight will be Health & Pharma.

Wednesday - By The Numbers

€1.9bn+: Dublin-based Jones Engineering is forecasting record turnover above €1.9bn this year, driven largely by data-centre construction. It generated €1.6bn in 2025, with more than half its business coming from overseas.

61%: Of respondents to a Business Post/Red C poll support limiting how much electricity any individual technology company can consume in Ireland. The debate over data centres' place on the national grid is not getting any quieter.

€250bn: The reported loss of market value among major European luxury groups this year as weaker Chinese consumer demand hits the sector. Even the world's wealthiest shoppers have apparently developed some spending restraint.

$25bn: The amount Microsoft is seeking to raise through its first US bond sale in nine years, with maturities ranging from two to 40 years. The AI infrastructure boom is increasingly being financed with debt as well as profits.

$8.46bn: BP's adjusted net income in its latest reported quarter, up from $2.21bn a year earlier and its strongest result in 18 years. Booming refining margins helped, while the company prioritised reducing debt over shareholder buybacks.

A rare Pokémon card has sold for more than €326,000, although the Danish company behind the sale is now worried the trading-card market might be in a bubble. Meanwhile, back in Kildare, the K Club increased operating profits by 37% to €1.84m in the year it hosted the Irish Open. Running a luxury golf resort requires hundreds of staff, two courses, accommodation and considerable maintenance. Apparently, selling a piece of cardboard with a cartoon creature on it also has its advantages.

The Listen – Business Post - Heir Of Defiance: How An Irish Film Maker Came To Tell The Story Of A Multi-Millionaire Communist

Irish documentary maker Sinéad O’Shea’s latest film, All About The Money, follows James ‘Fergie’ Chambers, an American heir who reportedly sold his stake in the family business for $250m upfront and began funding radical political causes. The story turns when Chambers, unhappy with the finished film, offers to cover its costs on condition it is never shown. O’Shea refuses. John Maguire’s interview is a fascinating look at extreme wealth, ideological contradictions and what happens when documentary access comes with the possibility of being bought. Link: Business Post: Heir Of Defiance: How An Irish Film Maker Came To Tell The Story Of A Multi-Millionaire Communist

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