Brian Cowen (Laois-Offaly, Fianna Fail)

On budget day, inflation as measured by the consumer price index was forecast to average 2.7% in 2006. Part of the pick-up in the annual inflation rate in February reflects the rise in interest rates by the European Central Bank. In addition, the price of oil rose throughout most of last year, which had an impact on the annual rate of inflation in February. We have no control over these external factors. My Department will publish updated forecasts in the autumn.

On an EU basis, Ireland's harmonised index of consumer prices was 2.7% in February compared to 2.3% in the euro area. Ensuring that our inflation rate moves back towards the euro area rate will be important for remaining competitive. I made no changes to indirect taxes in the budget, which will contribute to meeting this objective.

See this speech in context