Dr. Kieran McQuinn:

Our original outlook for inflation was pretty much along the lines of what most other people felt, which was that inflationary pressures would peak somewhere in the first quarter of this year and then gradually subside and abate towards the end of year. The danger related to what we call the second round effects, whereby we would have an initial spike in inflation and that would prompt people to look for higher wages or revisit contracts, along the lines of what the Deputy mentioned, and the initial spike in inflation would then prolong in the system for a period of time. We would have been arguing against that and saying that is not something we want to see. Unfortunately, it is highly unlikely the inflationary issue is going to go away in the short term. Everything we see in terms of the energy markets, cereal prices, grains and commodity markets is pointing to much higher prices certainly for the foreseeable future. The inflationary period we are now in is being prolonged because of what is happening in Ukraine. As to how long and severe it will be, it is a question of how long the crisis lasts and the conflict continues. Certainly, we are on the cusp of seeing very significant price hikes and, unfortunately, I do not see any great hope of those price increases abating any time soon.