The seemingly contradictory rationale comes despite a broadly positive quarterly economic statement from the ESRI
Cost of living problems could get even worse for households because the economy is doing so well, economists at think-tank ESRI have warned.
However, the Catch-22 is that with more money forecast to be swishing around in the economy, this could lead to inflation and rising prices again, just as households are getting to grips with the latest cost of living crisis easing slightly.The report warns: “While the robustness of the labour market is contributing to growth in consumption and income tax receipts, accelerated wage growth and capacity constraints are both likely to pose challenges to domestic growth.
“The labour market continues to operate near full capacity, with the unemployment rate falling to a near-historical low of 3.8 per cent in May 2023 and is expected to average under 4 per cent both this year and next.
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