Increase in inflation will prove dangerous, says Central Bank
19/10/2005 - 13:30:07The Central Bank has warned that any new national wage agreement must not be allowed to drive up inflation.
In its fourth quarterly bulletin for this year, the bank said future pay developments must take account of falling productivity, if our competitiveness is not to be threatened.
The high price of oil internationally is likely to impact on exchange rates, increasing pressure on Ireland to be internationally competitive - an area that we already perform poorly in, the bank said.
In order for the country to survive in the competition stakes, the bank says inflation must be kept low and that the Government must recognise this when setting wages and prices.
The Central Bank recommended a cautious budget for the coming year.
