Raising interest rates is not the way to curb inflation, says Central Bank

Governor Gabriel Makhlouf is worried about rising prices but says correction should be left to markets

‘Putting up interest rates today would be exactly the wrong thing to do, because it would hamper the recovery, reduce growth and lead to job losses.’ Gabriel Makhlouf, governor of the Central Bank. Picture: Bloomberg

Raising interest rates to tackle the current spike in inflation would only lead to job losses and reduce economic growth, Gabriel Makhlouf, governor of the Central Bank of Ireland, has said.

Makhlouf said fiscal authorities should have patience and allow markets to correct themselves, despite inflation levels hitting their highest peak in decades. In Ireland, the inflation rate hit 5.1 per cent last month, among the highest for any European member state, marking the first ...