Michael Noonan
Question:39 Mr. Noonan asked the Minister for Finance his views on the impact on the economy of increases in interest rates in 2000; and if he will make a statement on the matter. [9189/00]
Written Answers. - Interest Rate Effects.
As Minister for Finance, I have no function in connection with the setting of interest rates. The setting of official interest rates for the EMU area has been the responsibility of the European Central Bank since 1 January 1999 when the third stage of Economic and Monetary Union began and Ireland and ten other member states adopted the single currency. The ECB enjoys complete independence in relation to monetary policy matters. Retail interest rates are determined by financial institutions themselves according to competitive market conditions. I do not therefore propose to comment on future interest rate changes.
As regards the impact on the economy of a rise in interest rates, in general this would tend to moderate consumption and investment growth and, therefore, overall economic activity.