Singular ineptitude in forecasting inflation

Poor old Charlie McCreevy. For the second time in the space of a couple of months, he has been forced to revise upwards the likely end-year figure for inflation in the face of mounting demands for answers from the social partners, particularly the unions.

Can you imagine the fate of the forecasters at the Department of Finance if they were racing tipsters? Not content with failing miserably at calculating the likely Budget surplus and tax take over recent years, they have now shown singular ineptitude in forecasting inflation.

This is not merely an abstract philosophical argument. The current national agreement, the Programme for Prosperity and Fairness (PPF), was based on these misleading forecasts - although the efforts of the number crunchers of the other social partners must also be open to question. The PPF will determine what most people gain by way of pay rises over the guts of the next three years.

We are now looking at inflation forecasts of up to 5.25 per cent at the end of the year - a rise of 75 per cent on the Budget day projection from the Merrion Street mandarins. If bookies were as weak in setting their odds, there would be far more of them on the breadline, relying on Mr McCreevy's social welfare provisions.