Dr. Kieran McQuinn:

One point we should make up-front is that what is called the flash estimate from EUROSTAT was put out in the past couple of days, which suggests that the annual rate of inflation for the year to June was 9.6%, which is higher than what we would have anticipated. We produced an annual figure for this year of 7.2% but that was assuming essentially that inflation would peak at somewhere in the region of 8.2% or 8.3% at this point in the year. The fact that we are now up to 9.6% realistically means that the overall figure for the year will be higher than what we would have said even in our last commentary.

The additional measures that have been talked about have been talked about mainly in the aggregate at this time. Clearly, a lot will depend on the details of the package and the details of the measures that are implemented. This will be the crucial factor. Going back to the response to the previous question, the more these measures are targeted at those who need them the most, the better it will be from an overall macro point of view because if we are seeing income or resources going to people who might not need them as much, the danger is that it will spill over into additional inflationary pressures. It is very difficult at this point to quantify that when you do not know the details of the package but that is the danger of a sizeable package such as what is being envisaged.