Professor Michael McMahon:

Certainly there is a possibility that we will see the price of certain goods go up, as the Deputy says. Central bankers and the European Central Bank in particular would not view the price of specific goods going up, even by a lot, as a particularly worrying measure of inflation. It is a relative price change reflecting the demand. Measuring inflation is already very difficult during this current period because a number of goods that form part of the normal basket that goes into inflation are no longer being traded. That makes the pure measurement of it very difficult. It is even difficult to go month to month to realise how prices are really evolving at the true, underlying level. The Deputy's question may have been getting at whether we should worry about inflation. I certainly think in this first phase, the actions of the ECB and most central banks around the world have reflected the fact that at this moment, even if it were to tick up a little bit, inflation is not the main enemy. The objective is to keep the economy ticking over to the best possible extent, as some of the other Deputies have mentioned, to ensure that SMEs are there to re-employ workers when lockdown measures are eased, to ensure that shops can reopen and people have somewhere to spend any money that they have. At this moment, inflation is not where central banks should be particularly worried. In the past few years, central banks have, if anything, been under-achieving on their inflation targets. A small move up towards them is not necessarily a bad thing. As to whether we have to shift our focus back towards inflation in phase 2 and certainly into phase 3, that will probably be appropriate but it is quite a bit down the road, at least for now.