Brendan Howlin (Wexford, Labour)
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Question 62: To ask the Minister for Finance his views on the recent increase in the consumer price index; and if he will make a statement on the matter. [7856/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Inflation, as measured by annual changes in the consumer price index, CPI, rose to 3% in January from 2.5% in December. The main cause of this increase was the recent rise in interest rates by the ECB. In addition, the price of oil rose throughout most of last year and this had an input on the annual rate of inflation in January.

In my recent budget, my Department forecast that CPI inflation will average 2.7% in 2006. I made no changes to indirect taxes in the budget and this will help to ensure relatively modest inflation in 2006.

On an EU basis, Ireland's harmonised index of consumer prices, HICP, was 2.5% in January, compared to an estimated 2.4% in the euro area. Ireland has been broadly in line with the euro area for some time now.