Minister accused of insulting Dail over inflation measures

There would be a further "uptick" of inflation from the current rate of 5.2 per cent because of a number of factors, according to the Minister for Finance, Mr McCreevy.

He told the Dail that the recent increase in interest rates by the European Central Bank would, if passed on, push up the year-on-year increase "as measured month by month".

Mr McCreevy told Labour's finance spokesman, Mr Derek McDowell, that one of the reasons for the rise last month in inflation was the increase in food prices, primarily "the sudden rise in potatoes" because of climatic conditions.

There should be a further rise next month in inflation. "However, as matters begin to settle during the next 12 months, and given the usual caveats, inflation should fall," Mr McCreevy added.

Fine Gael's finance spokesman, Mr Michael Noonan, accused the Minister of "arrogantly insulting" the Dail by not informing the House what measures the Government was proposing to combat inflation.

Mr Noonan said it was not acceptable that the Government would make announcements outside the Dail for public relations reasons and deny deputies the information.

The Government Information Service was expected to announce a package of anti-inflationary measures later yesterday.

However, Mr McCreevy said there were no taxation measures in the package to be announced and nothing that came directly within his remit, so most of the matters cut across other Departments and would be dealt with by other Ministers.

Mr Noonan, however, said inflation was the most serious threat currently facing the State. The Government had come to decisions about inflation but was refusing to tell the Dail. He asked what the Minister's estimate was for annual inflation.

Mr McCreevy said inflation was only one of a number of factors affecting the economy. They included the weakness of the euro, the upward trend in oil prices, the increase in excise duties on tobacco, higher inflation in the services sector and the ongoing increases in alcohol prices.