The Minister for Finance Michael McGrath said today that all the indications are that the European Central Bank will lower interest rates next week.
Speaking on RTÉ's Morning Ireland, he said the banks will pass on this change to tracker mortgage customers "more or less immediately, and we would expect banks then to reprice their products accordingly".
He said that there are several factors that the ECB Governing Council has to consider.
"I think the key driver of their future decisions will be the data around inflation, and it's not for me, as Minister for Finance, to give advice or to comment on decisions beyond next week," Minister McGrath said.
"I think next week is pretty much locked in according to all the public commentary," he said.
"We respect the independent mandate of the ECB. They will look after monetary policy and I and the Government here will look after fiscal policy," Mr McGrath said.
"And that's why yesterday we had a very important round table at the National Economic Dialogue to hear the views of a diverse range of stakeholders as we approach the landing zone for Budget 2025 in the autumn," he added.
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The Minister for Finance said that slowing inflation is "a good thing, because that is what allows the ECB to make the decision to begin to cut interest rates,".
But he pointed out that prices are still rising, albeit more slowly, adding that the Government is very conscious of that.
"That is why we responded in an exceptional fashion over the last number of years with all of the additional supports, which were temporary in nature," he added.
"We're now at a point where inflation is back down at around 2%, but price levels remain high and a lot of people still are feeling the pressure," he said.
The Minister said the Government will weigh up in the coming weeks "whether the appropriate response is to put in place permanent measures given that we now are likely to be in a period where inflation is more stable.
"We had a whole series of temporary one off emergency supports at a time when inflation was 6%, 8%, almost up to 10%," he said.
"I do think you need to get back to a more normal approach to budgeting, and in that regard helping people means I think the emphasis should be on permanent supports and permanent measures whereby you recognise what the purchasing power is of incomes now, relative to what it was before we had the spiral of inflation kicking off in 2021," he stated.
"That's not to rule out any individual measure because we're not at that point. We haven't made any decisions," he added.
He said the increases in petrol and diesel prices is a restoration of a cut in excise that was implemented by Government in the early part of 2022, when up to 21 cent was reduced from of the litre of petrol at that time.
There has been a gradual phased restoration of the excise duty with one further increase due in August.
Mr McGrath said that fuel prices will be kept under review. "We have to consider where prices are generally - the cost of a barrel of oil, foreign exchange rates. There is a cross-border dynamic. All of that has to be taken into account," he stated.
He added that there are other issues that are important when it comes to the competitiveness and the cost base of the SME sector.
