Dr. Claire Keane:

As the Deputy said, at the moment this is topical in the UK and in Ireland. We are seeing that inflation for lower-income groups is higher than it is for higher-income groups but that does not tend to be the case over the longer term. If we look back, it tends to balance out. For example, there may be some things that higher income groups consume that grow at a higher rate. Certainly, however, there is nothing obliging one to use the average consumer price index, CPI.

If the CSO is planning, as it has stated it is intending to do and as the ONS has done in the UK, to produce CPI by, for example, income deciles or quintiles, there would be nothing to stop one from saying that in a year where the inflation rate for the poorest fifth of the population is significantly higher than the average, that could be used as the indexation rate. There is nothing forcing one to use the average. In general, what we would see is that the average and the inflation rates by income groups tend to be quite close. However, in a year where there is a big divergence, there would be nothing to stop one from, say, rather than using the average number, indexing the welfare system by price inflation and using the price inflation that is occurring for the poorest fifth of the population.