Oireachtas Joint and Select Committees

Wednesday, 24 November 2021

Committee on Budgetary Oversight

Inflation: Discussion (resumed)

Mr. Gabriel Makhlouf:

I made some remarks yesterday that were consistent with the statement I have just made. My position is that, on the evidence we see today, increases in interest rates are absolutely not warranted because the factors driving inflation, as I said earlier, are temporary. In fact, increases in interest rates today would have a very negative effect on economies. If, however, we saw the evidence change, my view is that we should respond without delay. The fundamental response to the Deputy's question is that if the evidence changes, my view is likely to change. Right now, however, the position we have taken is the reasonable one. I said yesterday that I think that in these circumstances patience is a virtue. Our position is the correct one, but we need to be vigilant because these are exceptional circumstances not just for the Irish economy and the euro area economy but also for the global economy. We need to be vigilant, make sure we understand exactly what is happening and maintain as much optionality in our toolkit in order that we may respond in reasonable time if the facts start to change.