Wednesday

Good morning. Ireland takes the EU Council Presidency today, the 9% VAT cut starts its real-world test, and manufacturing is still growing, just not quite as quickly as May. Worth Your Time goes lighter, with a look at how Ireland can turn sport into tourism spend. Let’s get into it.

1. Ireland Takes The EU Chair From Today. Ireland begins its six-month EU Council Presidency today, with Ukraine, Russia sanctions, the EU budget, trade pressure and competitiveness all on the desk. Volodymyr Zelenskiy is due in Dublin Castle for the opening, while cleaning, security and catering workers are also using day one to protest for better conditions. The Presidency is diplomacy, but it is also procurement, labour standards, sanctions, trade and regulation with Irish fingerprints on the process.

2. The 9% VAT Cut Starts Its Real Test. The hospitality and hairdressing VAT rate has dropped from 13.5% to 9%, following through on the Budget plan. It should give some relief to customer-facing sectors already showing insolvency stress. Restaurants, cafés, caterers and salons now get the relief they spent months seeking. The next question is more awkward: whether the cut protects smaller operators, lowers prices, supports wages or simply disappears into the cost base.

3. Factories Are Still Growing, Just More Slowly. AIB’s manufacturing PMI eased to 54.9 in June from May’s 55.9 but stayed above the 50 mark that signals expansion. Output, new orders and employment still rose, which keeps the sector in growth territory rather than warning-light territory. For exporters, it is not panic time; the question is whether market diversification and operational agility can keep absorbing trade, tariff and demand shocks.

4. July Starts With Payroll On Both Sides. The previous public-sector pay deal expired on 30 June after delivering increases of up to 10.25%, leaving the Government, unions and public finances facing the next round. At the same time, auto-enrolment is putting pension saving directly into payroll for workers and employers again, with people now able to opt out. However, walking away from employer and State contributions might not be much of a long-term plan. Pay policy is not quieting down; it is landing through wages, retention, pensions and Budget room.

5. Climate Delay Gets A Budget Number. The Irish Fiscal Advisory Council has warned that failure to act on climate change could cost the State up to €13bn by 2050. That turns climate from a future-risk paragraph into a public-finance issue with tax, spending and infrastructure consequences. The harder question is not whether climate policy is expensive; it is whether delay leaves the Exchequer paying for the same problem with fewer choices later.

Qatar says there are no US-Iran talks under way, despite US envoys being in Doha, which keeps the oil and Hormuz risk unresolved rather than reopened. The EU side of its trade deal with the US starts today, cutting duties on many US goods until 2029 and putting Ireland’s Presidency straight into tariff politics. Keir Starmer has unveiled a £15bn UK defence investment plan hoping to make a positive departure, with drones, submarines and fighter jets now competing with roads, energy and housing for fiscal room. Markets closed Q2 with the S&P 500 up 14.9% and the Nasdaq up 21.4%, led by tech and semiconductors. The world is still buying growth, but it is making governments explain the bill.

Finance & Markets

After a week that opened in the shadow of a chip-stock selloff, global markets didn't just recover; they closed the quarter at their best in six years.

The S&P 500 gained roughly 14% over the second quarter, the Nasdaq around 20%, its strongest quarter since mid-2020, while the Philadelphia Semiconductor Index posted its best quarter on record. The tumultuous US-Iran ceasefire, reopened the Strait of Hormuz and eased energy-price fears, giving the last week’s markets momentum. Dublin participated modestly: the ISEQ edged higher through the week, with Glanbia and Kerry Group sharing the top spot among ISEQ performers for the quarter, a reminder that Irish-listed food companies continue to outperform the noisier parts of the market.

The PTSB story moved on too. The Competition and Consumer Protection Commission unconditionally cleared Bawag's €1.62 billion acquisition this week, removing one regulatory hurdle ahead of the July 30th EGM. The Court of Appeal hearing on July 8th, testing minority shareholder Piotr Skoczylas's classification challenge, remains the live risk before that vote.

A quieter but pointed domestic story: an Irish Times survey published Friday found 35% of adults who do not currently invest said they would do so if a tax-free investment account were introduced, while Davy and PwC separately called in Budget 2027 pre-submissions for CGT cuts from 33% toward 25% or lower, citing Ireland's rate as among Europe's highest. The eight-year deemed disposal rule, which taxes unrealised gains in funds even without a sale, drew particular criticism. Separately, AIB and Bank of Ireland confirmed a U-turn on ATM withdrawals, reversing planned cutbacks under consumer and political pressure.

Watch the Court of Appeal on July 8th, and whether Minister for Finance Simon Harris signals any CGT movement in his summer economic statement.

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

Wednesday - By The Numbers

21%: The Russell 2000's first-half gain, its best since 1991, as AI spending spreads into smaller chip suppliers beyond Nvidia.

1 in 5: Irish consumers who say they cannot afford a holiday this year, a strain sitting beneath quarter-end euphoria.

30%: CME FedWatch's current probability of a July 28th Fed rate hike, keeping rate risk live for Irish borrowers watching Frankfurt too.

£455m: Grafton Group's cumulative share buybacks since 2022, with a fresh £25m tranche launched Tuesday, choosing cash return over expansion in a soft construction market.

An accountancy firm told the WRC it “forgot about” a bookkeeper of 45 years after a merger, which is a brave contribution to the science of post-deal integration. Elsewhere, one in five Irish holiday budgets have been cut, even as Dublin Airport prepares for around 11 million summer passengers. For anyone not joining the security queue, the Irish Times has a "special report" on the summer-gatherings calendar: festivals, food, family events and the old reliable Irish holiday strategy, making a day of it.

The Read – The Irish Times: Special Report – Making A Sporting Spectacle Of Our Tourism Offering

Ireland is not short of visitors, but this piece is useful because it looks at how tourism can be built around events rather than scenery alone. The sporting-spectacle angle matters when Dublin Airport is heading into a huge summer, holiday budgets are under pressure, and domestic operators need reasons for people to spend at home as well as abroad. For anyone in hospitality, events, local business or tourism policy, it is a timely read on turning attention into actual footfall. The Link: Making A Sporting Spectacle Of Our Tourism Offering

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