Inflation biggest threat, warns EU commission

INFLATION is one of the major threats to the EU economy and governments need to control anything that could contribute to rising costs, including wage increases and prices, the European Commission has warned.

Where Ireland is concerned, the slowdown in the housing market and domestic house construction will continue to dog the economy well into next year, the spring economic forecast said.

Predictions for growth in the EU were cut again for this year to 2% (1.7% euro area) and will be even lower in 2009 at 1.8% (1.5% euro area), according to the Economic and Monetary Affairs Commissioner, Joaquim Almunia.