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John Corrigan Colm Mahady/Fennells

We should be worried about low inflation, says NTMA chief

Moody’s ratings agency “delayed on the way down and on the way up” on Irish debt.

THE CHIEF EXECUTIVE of the National Treasury Management Agency has said the low level of inflation in the Eurozone is “clearly a cause for concern”.

Speaking last night, John Corrigan said “the low rate of inflation in the eurozone at the moment, which is running well below the 2 per cent target set by the European Central Bank, is clearly a cause for concern”.

He said that a higher rate of inflation would help Ireland’s debt sustainability.

Corrigan also said that he believed the president of the German central bank, Jens Weidmann, would support some form of Quantitative Easing (QE) by the European Central Bank.

“It’s interesting that Mr Weidmann,who is Mrs Merkel’s representative on earth at the ECB…clearly has moved into the camp which says this (QE) is an inevitability.”

Corrigan was speaking as he delivered the annual Certified Public Accountants Ireland business lecture in Dublin last night.

He went on to say that he saw no reason to increase the rate at which the government is selling bonds issued as part of last year’s promissory note deal should be increased unless the economic recovery gathers pace.

His words come after reported pressure from the ECB to increase the rate at which the bonds are to be sold.

“There is a clear schedule there which the Central Bank and the ECB have committed to. That schedule will not be departed from unless things are significantly improved.”

Corrigan also said he thought ratings agencies will hold off until the budget before considering another change to Ireland’s debt ratings.

In an implicit criticism of the ratings agency Moody’s, which did not mark up Ireland’s debt rating until after it had exited the bailout programme and returned to the international money markets, Corrigan said the agency “delayed on the way down and on the way up too”.

Central Bank: The economy is on the up, but inflation remains stubbornly low>

NTMA reaffirms aim to raise as much as €10 billion from markets this year>

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    Mute Hairy lemon
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    Apr 16th 2014, 7:39 AM

    Summary: Fat cat on huge money says prices should be rising faster so his job would be easier….

    Nothing of the people (who pay his salary) and the effect of rising prices on those stretched folk.

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    Mute Jim Brady
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    Apr 16th 2014, 7:50 AM

    It’s a bit more complicated than that. Rising inflation reduces effective debt burden. It also includes wage inflation.

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    Mute johngahan
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    Apr 16th 2014, 8:25 AM

    Corrigan is one of the few competent people we have on Team Ireland.

    You expect him to ditch his mandate to fund the state as economically as possible and instead do what?

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    Mute Hairy lemon
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    Apr 16th 2014, 11:39 PM

    @Jim. Are you saying it is more complicated than a one line summary…??? Really…!

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    Mute Pierce2020
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    Apr 16th 2014, 7:35 AM

    Once Germany is happy that’s all I worry about.

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    Mute Jarlath Murphy
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    Apr 16th 2014, 7:43 AM

    Oh wait the coping classes have not entirely gone under yet!

    Let’s throw some petrol on the fire and rack up the interest rates to ensure the wealthy banksters get a better return on their cash.

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    Mute Bobby
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    Apr 16th 2014, 7:40 AM

    The inflation rate suits the German economy. One of the few countries in Europe that benefit from the Euro.

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    Mute FlopFlipU
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    Apr 16th 2014, 8:58 AM

    We are a experiment ,the paddy is a experiment , are their eyes bulging yet ,keep going and see what happens

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    Mute iBob101
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    Apr 16th 2014, 8:56 AM

    Merkel’s representative on earth! Take a bow, sir!

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    Mute Fergal Reid
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    Apr 16th 2014, 10:40 AM

    Well we’re hardly going to have healthy inflation (or much inflation of any kind) if there’s flatlining consumer spending.

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