Mr. Gabriel Makhlouf:

It is worth starting to answer the Deputy's question by repeating a little bit of what I said earlier. It is essential that we get on top of inflation and bring it back to our target range because, ultimately, if inflation is not brought back to our target range, the consequences will be damaging to the whole economy and the whole community over the medium to long term. At the moment, the impact of inflation is hurting the most vulnerable. That is what was indicated by Central Bank research published last year. My governing council colleagues at the ECB and I recognise that putting up interest rates has an impact of everybody's standard of living. It is important that everyone understands why we are doing it. To a certain extent, those in this room and opinion-makers and opinion-formers in the media and elsewhere, need to help to communicate that message in order that people understand why this is happening.

Do we expect the banks to pass these increases on? We expect monetary policy to ultimately be transmitted to all parts of the euro area but, of course, it is up to individual lenders to decide whether they are going to pass them on. As I described earlier, the banks in Ireland have taken different decisions to those taken by banks elsewhere in the euro area. However, we do expect the monetary policy decisions we make to ultimately be transmitted, whether directly or indirectly, to the whole economy because the point of making these decisions is to achieve that so we can, in time, reduce inflation. That is the key thing.

I believe what is underlying the Deputy's question is the question of how we expect the banks to manage the most vulnerable customers, the people facing particular challenges such as those in the Deputy's example. I may ask Mr. Kincaid to come in on that.