(Reuters) – Irish central bank chief Gabriel Makhlouf called for the cost of housing to be given more weight in the way inflation is calculated in the euro zone, according to the Financial Times.

According to Makhlouf, housing costs, at least in Ireland, are the main issue in creating a gulf between public perceptions of price rises versus the official inflation data, the FT said here

“If people’s reality (of inflation) is different to the one that we assert then we have got a problem,” Makhlouf, who sits on the European Central Bank’s rate-setting Governing Council, told the newspaper.

A lack of affordable housing and sky-high rents were central issues in Ireland’s national election in February, which saw the left-wing Sinn Fein party win the most votes.

A surge in support for Sinn Fein was related to the major campaign issues of healthcare and the high cost and low availability of housing, and Makhlouf said the supply of housing needed to be addressed in Ireland.

The supply of housing would also depend on changes to the planning system, public infrastructure and availability of labour, Makhlouf added. “It is more than a fiscal question.”

Makhlouf also said a failure between Britain and the European Union to agreed a post-Brexit trade deal was the biggest immediate risk to the Irish economy because of its close trading links to the UK.

Ireland’s economy is likely to be hit by trade tensions, changes to international tax rules and the disruption of the coronavirus outbreak, he added in the FT interview.

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