Bank of Ireland’s September 2026 outlook forecasts headline HICP inflation will reach 4% in the final months of 2026, then average 3.2% in 2027. That is a projection, not a report that inflation has already reached 4%. The Bank’s group chief economist, Conall Mac Coille, separately told the Irish Examiner that CPI inflation could peak close to 4% around the turn of the year.
What Bank of Ireland is forecasting
The Bank’s September 2026 Ireland outlook expects HICP inflation to rise to 4% in the final months of 2026. It forecasts an average HICP rate of 3.2% for 2027. The first figure is a forecast peak late in 2026; the second is a forecast average across the following year, so they describe different periods rather than competing estimates.
In the Irish Examiner’s account, Mac Coille used the term CPI when discussing a peak close to 4% “at the turn of the year.” The distinction matters: the official outlook’s headline forecast is labelled HICP, while the quoted comment is labelled CPI. They should not be treated as the same measure or silently relabelled.
Why does the Bank expect inflation to rise?
The stated driver is the surge in oil and gas prices. Higher energy costs can put pressure on household spending power; Mac Coille described the expected effect as an “unwelcome squeeze,” particularly for people on low incomes. The direction and duration of oil and gas price pressures therefore matter to whether the forecast peak is reached and how long inflation remains elevated.
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The Central Bank of Ireland had already identified higher energy prices as an inflation risk in its Q1 2026 Quarterly Bulletin. That earlier bulletin is useful context, but its projections and conditional energy-price scenarios were based on different assumptions and predate Bank of Ireland’s September outlook.
How the inflation forecast fits the wider outlook
Bank of Ireland’s September outlook also projects a contraction in GDP in 2026 alongside continued growth in modified domestic demand. These are separate measures of economic activity and both are forecasts, not final outturns.
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| Measure | 2026 Bank of Ireland forecast | 2027 Bank of Ireland forecast |
|---|---|---|
| GDP | −1.2% | +3.1% |
| Modified domestic demand | +3.8% | +2.8% |
| HICP inflation | 4% in the final months of the year | 3.2% annual average |
For modified domestic demand, the Irish Examiner reports 3.9% growth for 2026, compared with 3.8% in the Bank’s official summary; both give 2.8% for 2027. The Bank’s published figure is used above.
What the forecast says about households and housing
The outlook projects consumer spending growth of 1.8% in 2027, pay growth of 3.5%, and job creation of 2%. It also incorporates planned Budget 2027 tax cuts of €1.5 billion. These figures are part of the Bank’s outlook, not guarantees of what households will experience; the projected energy-price squeeze could weigh more heavily on households with less room in their budgets.
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For housing, Bank of Ireland forecasts house-price inflation of 4% through 2026 and 3.5% in 2027, with 39,600 housing completions in 2026 and 42,000 in 2027. These, too, are projections rather than recorded outcomes.
How to compare it with the Central Bank forecast
The Central Bank’s Q1 2026 bulletin projected HICP inflation of 2.9% in 2026 and 2.6% in 2027 in its baseline. Its more severe energy-price scenario put HICP inflation at 4.2% in 2026 and 3.8% in 2027. The scenario is conditional, not the Central Bank’s baseline forecast, and the bulletin was published before Bank of Ireland’s September outlook. The figures therefore reflect different forecast vintages and assumptions, rather than a direct revision by one institution of the other’s forecast.
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What to take from the 4% figure
The headline is a forward-looking warning that energy costs may push inflation higher late in 2026. It does not establish that inflation has already hit 4%, nor does it mean every price will rise by that amount. The key qualifications are the measure used (HICP in the official outlook, CPI in Mac Coille’s quoted comment), the late-2026 timing of the projected peak, and the uncertainty around oil and gas prices.
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