High inflation in recent years has led to lasting damage to Irish competitiveness, the Central Bank said in its winter bulletin. The bank says the country has not only lost its competitive edge but in absolute terms the price level in Ireland is now 12% above the EU average.

The bank has welcomed the recent narrowing of the gap between Ireland's inflation rate and the level of price rises in our major trading partners. But it says the damage done by high inflation over the past few years is the