Mr. Gabriel Makhlouf:

Yes. We have a fairly good understanding at the moment of what is driving current inflation in Ireland. It is similar to what is driving much of the inflation across the euro area as a whole. The main reasons are the supply bottlenecks that have essentially come out as a result of the pandemic. What we have had over the past two years is an extraordinary period where economies were voluntarily closed down by governments. We have now seen those restrictions lifted. As a result, the accumulated savings households have made have been able to be spent and a lot of big demand for goods in particular appeared towards the back end of last year. The demand for those goods could not easily be met as a result of what I described as supply bottlenecks. To some extent, some of these were closer to blockages than bottlenecks. It has taken a bit of time for supply in Asia, for example, to meet the demands in Europe. Some of it is quite basic in the sense that shipping containers and ships were just unavailable or in the wrong places to transport the goods. The lack of supply has been a very big driver in inflation.

Energy prices, again for similar reasons, largely as a result of supply bottlenecks, and this was before the war in Ukraine, were pushing up the price of inflation. That is why the Deputy would have heard me and others at the ECB say we could see inflation coming down because we could see those bottlenecks over time getting addressed. That has been the main driver of the current inflation we have seen.