Mr. Derek Moran:

In terms of the Irish Fiscal Advisory Council, its role primarily in relation to the Department is, among other things, to look at the forecasts for the economy which bridge all of those issues – the constraints, the capacity constraints, the cost base, employment, unemployment, etc., and to independently assess where that falls within a credible range. It has consistently done that.

One of the issues that we have with success is that as employment numbers go up and as unemployment falls, we start to get to a capacity constraint. We have got higher demand for goods such as housing and so on, but also as one gets down to near enough what technically would be full employment, let us say 5% or thereabouts, one starts to get those additional pressures and the potential for overheating within the economy. I do not think we are quite there yet, but we have to and should be concerned about it. In terms of cost of living and accommodation, everybody is very aware of the supply constraints within the housing sector. That is a concern for all of Government and a set of policy responses is either in place or is being put in place. The reality is that there is a big gap between demand and supply and that puts pressure on prices.