Dr. Kieran McQuinn:

I will come in on the last couple of points the Deputy made about the inflationary pressures specific to Covid. Then I will comment on vulnerabilities to swings and roundabouts and international markets. Dr. Farrell might jump in on the energy side, and I will deal with the capital expenditure issue. Then, in the absence of our environmental colleagues, maybe we will all talk a little about the carbon tax issues the Deputy raised.

Earlier I made the point that the way I look at this is that there are four different factors influencing the inflationary pressures we are experiencing now. Some of them are specific to Covid, some may be less so and some involve existing issues we have in the economy being exacerbated by Covid. Energy costs are clearly an international phenomenon. The supply chain issues are very much an international post-Covid situation. As for the base effects, prices were very low last year and there was deflation in some sectors. Clearly, any increase in prices this year will result in fairly large swings in inflation. Again, that is Covid-related.

Housing issues are a classic example of Covid compounding difficulties that were already in the market in terms of the imbalance between supply and demand. If anything, Covid seems to have provided almost a stimulus to the demand side of the housing market in the form of the increase in savings we have seen. There seems to be preliminary evidence to suggest that some of those savings will come back into the property market rather than into other areas of consumer expenditure. That will stimulate to a certain extent the demand side of the market. The supply side of the market was particularly impacted by Covid between the lockdowns and then the sharp increase in costs in certain sectors of the supply side of the market.

That is our overall viewpoint. As I said, some of these issues are more Covid-specific, some are international and some involve the interaction between Covid and existing vulnerabilities or weaknesses in the domestic economy.

Does Dr. Farrell wish to talk about energy? Then I will come back to the capital issue.