Mr. Michael McMahon:

It is true that inflation is slowing. We always need to be careful to recognise that when we say inflation is slowing, it just means that prices are going up less quickly. It does not mean that prices are falling. In aggregate, the rate for April was 7.2%. That means that this April, compared with April 2022, had 7.2% higher price levels than the average basket. When we got to May, it was only 6.6% higher than the previous May. Yet, May was higher than the April before it. Therefore, the price level has still gone up. Within that, there are lots of different things going on. Some prices do tend to fall. Energy prices have started to fall, which is of course a very welcome development, given both the challenges people faced and the worries about the challenges people were to face last winter.

Predicting what energy prices will do is an incredibly difficult thing and, as we know, it is very dependent on geopolitical developments. I certainly have no expertise in that area, although I can tell the Deputy what the best guess is. Even if inflation were to come down to close to the ECB's target of 2%, that would not take away from the cost-of-living aspects of that, which are large, and the cost of doing business aspects of that, which are also large. Inflation is a really damaging economic phenomenon because it hits everybody, although this does not necessarily happen to everyone in the exact same way. Yet, it really does affect everybody.

We are optimistic in the report that inflation will come down. Yet, it is worth pointing out that this does mean that price levels will be permanently elevated, compared to where they were before last year.