Séamus Pattison (Carlow-Kilkenny, Labour)
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Question 145: To ask the Minister for Finance his views on the implications for the Irish economy of the expected further increase in interest rates; and if he will make a statement on the matter. [3901/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Interest rates have been very low in historical terms, and the recent increases would appear to have had an effect mainly on reducing the rate of house price increases. The current higher level of interest rates will tend to lower overall domestic demand in the economy, all other things being equal. The effect of further increases would be to reinforce this effect depending on the state of the economy generally and developments at an international level e.g. the impact of oil price changes on domestic demand. Page E.18 of the Stability Programme Update in Budget 2007 discusses these issues in further detail.