Mairead Farrell (Galway West, Sinn Fein) | Oireachtas source

It is an interesting discussion and it is the hot topic of the day. I thank Mr. O'Connor for that, as it was a very interesting response and engagement.

On another question, I cannot remember when we had the Central Bank officials in before the committee – it was at some point in the last weeks or months - but I asked them about the risk of stagflation. It now looks likely that the ECB will hike interest rates in July whereas for a very long period – obviously, this was before the war in Ukraine - the ECB was clear it was not going to increase interest rates. If we look back to previous times, the ECB increased rates in July 2007, when we entered the global financial crisis, and it also did it in July 2011, when we entered the eurozone sovereign debt crisis. This is something we discussed with the Central Bank officials and it was interesting to hear their response. I have a fear that the ECB will decide to hike interest rates in the middle of war and of high inflation which is primarily due to energy prices.

I would be interested to hear Mr. O'Connor's view. My concern is that that would happen and it would not bring down inflation but could slow growth and increase the risk of stagflation. What is Mr. O'Connor's view on the risks of stagflation resulting?