Central Bank warns spending hikes risk overheating economy

This comes ahead of the Government's last budget before an election

Head of Irish economic analysis at the Central Bank of Ireland Martin O'Brien with director of economics and statistics Robert Kelly. Picture: Sasko Lazarov/ RollingNews.ie

The Government is risking overheating the economy, which could lead to higher inflation and cause damage to Ireland's competitiveness, should it continue to increase core expenditure in the upcoming budget, the Central Bank of Ireland has warned.

This comes as the Government approaches its last budget before a general election. Next month, the Department of Finance will publish its summer economic statement, which sets the fiscal parameters for budget discussions over the coming months.