Photo: Steve HumphreysThe Government will have to be “very careful” to make sure the budget does not overheat the economy, the Central Bank governor has advised. The Central Bank this week revised up its forecast for domestic growth to 3.7pc in 2023, with inflation expected to cool to 5.3pc from almost 8pc last year. But underlying inflation - minus volatile food and energy prices - is set to continue rising this year, and will outstrip headline inflation by 2025, mainly due to rising wages, the bank predicts. The European Central Bank warned last week that it would be forced to further raise rates if rising wages or giveaway budgets push up inflation any further. “Choices on specific priorities for tax rates and base, reliefs, and all current and capital spending should be considered within this overall bound.”

Source: Irish Independent June 23, 2023 21:26 UTC