Varadkar: Banks cannot have it both ways on rate increases
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The Taoiseach has told banks that they "can't have it both ways" on rate increases.
Leo Varadkar was reacting in Washington DC to the news that the European Central Bank had moved ahead with a 0.5% interest rate hike despite fears of a banking crisis, fuelled further by the meltdown at Credit Suisse.
The rate increase is the sixth by the bank in less than a year, but Mr Varadkar said that any mortgage rate increases should be matched by similar increases in the rate of interest for deposits.
The Taoiseach said it "wasn't a surprise" that the ECB had made the decision, but said that rate increases needed to go both ways.
"The ECB is independent and makes decisions without approval from the EU governments. I do understand why they're doing it," he said.
"We shouldn't forget that the reason why the ECB is putting up interest rates is to bring inflation down and try and get inflation under control, and that will benefit everyone.
"But obviously, I'm very conscious that for mortgage holders, and for other lenders, they're going to see a further increase in repayments. And that's unwelcome.
"They can't be putting up interest rates for people who are borrowing and for people who have mortgages.
"There's a huge amount of savings on deposit in Irish banks, never more than was the case. Particularly older people who have household savings. Surely the interest rates and the returns they get should be going up as well. The banks can't have it both ways when it comes to things like this."
Mr Varadkar said he is not concerned that CSO statistics showed inflation rising last month.
“We still anticipate that inflation is going to fall through the course of the year. Some of that will be a base effect," he said.
"What we've announced already will be implemented. That's the additional energy credit coming off people's bills at the moment and also the extra payments for child benefit for pensioners and others. So all of that will continue.
"I'd never read anything into any one month's statistic when it comes to inflation. That can happen for all sorts of reasons. It’s still our anticipation that inflation will fall throughout the course of the year, probably average at about 5%.”
The Taoiseach also said that the Government has requested an intelligence update on the use of TikTok on phones of civil servants.
A number of governments have raised concerns about the Chinese-owned company's app's presence on phones of those who may have access to sensitive information.
"We have requested advice from the National Centre for Cybersecurity on TikTok. As things stand, we're not advising anybody in the public sector or in Government to remove TikTok from the work phones but that is still under review," he said.