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Household Resilience to Current Income and Cost-of-Living Shocks

Author

Listed:
  • Pratap Singh, Anuj

    (Central Bank of Ireland)

  • Yao, Fang

    (Central Bank of Ireland)

Abstract

Household balance sheets have strengthened since 2018 and are projected to remain resilient under a baseline scenario for the domestic economy. In an adverse scenario where interest rates and the cost-of-living increases, the share of mortgages at risk could rise modestly relative to the 2024 level, from 6.4 to 8.7 per cent. Despite current levels of resilience, there is still a group of lower-income households that are more vulnerable. Under this particular adverse scenario, the share of mortgages at risk in the bottom third of income distribution (representing around 7.6 per cent of the share of mortgages) is 35 per cent.

Suggested Citation

  • Pratap Singh, Anuj & Yao, Fang, 2025. "Household Resilience to Current Income and Cost-of-Living Shocks," Central Bank Staff Insights 10/SI/25, Central Bank of Ireland.
    • Handle: RePEc:cbi:stafin:10/si/25
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    File URL: https://www.centralbank.ie/publication/research-publications/staff-insights/household-resilience-to-current-income-and-cost-of-living-shocks
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