I ask the Minister about the cost of living and what will be done about it. Energy prices are rocketing. We saw two energy companies, Budget Energy and SSE Airtricity, announce cost increases of 29% and 9%, respectively, in September. Our laoch thar lear or dhroimeann donn dílis that will save us, Equinor, has pulled out of the Moneypoint project, which hopefully will not scuttle it but will certainly delay it. People are seeing increases in the cost of their shopping baskets already. Almost all of the big agrifood companies published warnings about increasing costs through the late summer and September. Somebody who works in the agrifood sector and for whom I have great regard told me he expected to see food inflation hit 40% by the end of next spring. A 40% increase in the cost of a shopping basket is huge on top of energy costs.

As regards the construction industry, the CSO has announced that this year the cost of structural steel has increased by 26.7%, the cost of rough timber has increased by 60% and the cost of plaster has increased by 20%. I do not know what the Government can do about all of these increases individually, with the possible exception of timber. The lack of felling licences is inexplicable when the Department of Housing, Local Government and Heritage is being warned about the costs of materials. Of course, these do not only apply to timber. We do not produce steel in this country but the lack of felling licences is inexplicable.

On the broader issue, what will be done? It seems clear now that we are in a period of inflation, which is estimated to have been 3.79% in September. It is 3% in Germany. The Financial Times yesterday announced that the Federal Reserve was to taper its stimulus programmes. I accept it has been a long time since monetary policy for Ireland was set by the Minister for Finance. It was set for a very short period given the peg to sterling and that short period is not really a glowing reference. However, the Minister is also the chair of the group of eurozone finance ministers. Is inflation a concern of the Minister and his colleagues? What will be done about it because monetary policy is obviously the response? The Minister does not control it; it is controlled by the European Central Bank. Professor Philip Lane is the chief economist in the ECB and its head is not an economist. I am not suggesting that monetary policy will be set for Ireland, which is on the periphery. Clearly, it will be set for Germany. Does the Minister accept that inflation is a concern everywhere? Does he expect to see counter-inflationary measures? What would he like to see done about inflation because ordinary people cannot bear the rising costs?

I thank Deputy McNamara for raising this matter. This is an issue that the Minister for Public Expenditure and Reform, Deputy Michael McGrath, and I acknowledged in our budget day contributions. We acknowledged that we have seen, particularly across the summer period, a steady increase in the inflationary and cost-of-living pressures that many are facing. The Government is well aware of the additional challenge and cost that these are adding to families, businesses and workers all over the country. We appreciate that, as we try to put this awful disease behind us and heal the economy and lead it to recovery, for this additional burden of rising costs to be faced by many is an additional and a real challenge that we have to acknowledge and respond to.

At European level and on a global level, there are many catalysts for this change that, as Deputy McNamara acknowledged, are beyond the influence and control of a small open economy like Ireland's and even economies that are far bigger than ours. The biggest countries are having to confront the changes happening in energy markets and the changes that have happened in global supply chains.

The Deputy asked what my colleagues across Europe feel about this and what their judgment is on the matter. As I indicated on budget day, we are seeing inflation levels begin to increase. We said that there is a risk that they will increase further beyond the forecast on budget day. In terms of what we can do about it at an economic level across the eurozone, the President of the European Central Bank has already said that she will take care regarding changes in monetary policy because we are still in a situation where the economic costs of the pandemic are so real that we must nurture many employers back to a position where they are able to provide sustainable employment. That is a key consideration in the choices that employers are making.

That leads into what we can do here in Ireland. What we are doing here is making practical changes, such as the increase in the fuel allowance made by the Minister for Social Protection, Deputy Humphreys, which took effect on 27 September, and also the changes to the income threshold, which will be increased by €20 in January 2022. This is also the reason the Government brought forward a personal tax package. We believe that those on low and middle incomes in particular should receive additional support in coping with the cost of living. Other than the Government, it appears that no one in this House believes that targeted changes in personal tax have a role to play in helping people with the cost of living. Those changes, combined with what we have done on social welfare, are what we are doing to respond to the challenge Deputy McNamara correctly identified.

With respect, I think the Minister will agree that the relatively minor changes to social welfare will be eaten up quickly by the inflationary pressures, in particular in the energy market, and beyond that in food prices, building costs, etc. People cannot afford to heat their homes or carry out the building that would make it cheaper to heat their homes.

I asked the Minister what he would like to see and I did not hear that. I can read a commentary in The Economist on what Christine Lagarde is doing but I would like to think that we are more than mere bystanders reading the Financial Times and The Economist, that we have some input as a nation, either at the eurozone table or, more broadly, into our monetary policy, and that we are not just drifting along. As the Minister for Finance of a sovereign state, what does the Minister want to see done with monetary policy in Europe in response to this? Only that will have an impact on inflation and inflationary measures in the long term. Are we entering a period of quantitative tightening? What impact will that have on the Government's ability to borrow?

In any comments that I make publicly, particularly on the work I do within the eurozone, I have to be conscious of and respect the independence that the European Central Bank has in these matters and I have to recognise that, for decisions that it makes that are significant for all of the economies in Europe, it is independent and it has to make those decisions independent of public and political influence.

More broadly, what I want to see is budgetary and monetary policy continuing to operate in an integrated way. Recognition that the financial market environment within which Ireland borrows could change is the reason Ireland is committed, over time, to steadily reducing the amount of money that we need to borrow and to getting ourselves in a position for next year - one year ahead of schedule - where our only borrowing needs will be to fund to invest in our future. I believe we will see over time - I hope at the right time - changes in how countries such as Ireland need to fund themselves.