Dr. Conor O'Toole:

We do not have any evidence of price gouging in specific markets around the inflation problem. It is clear profits are rising to historical highs.

I think that is quite a feature of the current inflationary environment.

I will address the point the Deputy made about the degree to which we have seen any wage-price spiral emerge. I refer to one of the risks that we would often see when one has an inflationary-driven cycle that first starts with these energy prices, which are outside of our control due to international markets, and which start to pass through. We have seen some of the big increases towards the end of last year, from October onwards, with regard to the pass-through to residential and business customers. It can often take some time then for the second round effects to hit. One of the risks that we see is that we may see some of those energy price inflationary series slipping a bit with regard to the overall price growth. However, then one starts to get that feeding through into wages, and one gets these second round effects coming in with a little bit of a lag. That is the risk that one would not necessarily see now, but the composition inflation will change away from these exogenous factors - the energy price factors - towards the more domestic factors.

One of the points we always note is that when you see the unemployment rate at these historical lows, very often you will see a pick-up in the core inflation that is associated with long-term periods of unemployment levels. These are really the risks. We feel the inflationary environment is coming down a little bit, but there is a compositional shift that could happen.