Mr. Paul Johnson:

Inflation at the moment across Europe is largely externally generated. This is not inflation, whether in the UK or, I am sure, in Ireland, that is created by increases in wage costs, for example. It has been created, as we know, by increases in energy costs and by problems with supply chains across the world. The UK, as a relatively small open economy, and the Republic of Ireland, as a much smaller open economy, are very much impacted by trends elsewhere in the world. If we look further back, a large part of the low levels of price inflation we have seen over the past 20 years has been attributed by at least some people to the opening up of China and elsewhere, and the resulting cheap manufactured products that we have been able to purchase. Therefore, yes, external changes are very important for domestic inflation.