Mr. Gabriel Makhlouf:

It is worth repeating something that Mr. Madouros said earlier. We have been running an accommodative monetary policy for a long time. Since December 2021, we have started to normalise policy. Negative interest rates are not normal. What we started in December 2021 was to signal that our asset purchase programmes would start to be reduced. We started in March of last year with the end of the pandemic emergency purchase programme, although we will still be reinvesting the proceeds of that for a while, and we put up rates in July. The normalisation process is ongoing, therefore.

Where restrictive territory sits is one of the big debates economists have and which there is no single answer to. My view is that we are not in restrictive territory but I can see us getting into it. The number the Deputy described is more restrictive than where it would have been but is it where we will stop? The people who say they know are just speculating wildly. One of the things we have said for a while is that we will be adopting a meeting-by-meeting approach to our decision-making. I said what I think should happen next week but I did so because I feel I know most of the data and information there is to know. However, I will not speculate today on what we will do in March. I think I know what we will do in March but we will have new projections then, which will inform us quite a lot. What will happen after that is speculation. We must bear in mind that inflation is high and that core inflation, which is inflation excluding energy and food prices, has gone up slightly. Therefore, it would not be surprising to see us continue on this path of interest rate rises beyond this first quarter.