Central Bank warns blanket cost-of-living support risks fuelling inflation

The Central Bank of Cyprus warned on Tuesday that cost-of-living measures must target vulnerable households, saying blanket support can push prices higher by boosting demand. Spokeswoman Maria Papageorgiou told the House commerce committee that a European study found 31 per cent of Cypriot households were unaffected by price pressures. She said the European Central Bank is raising interest rates to contain demand-driven inflation, though rate rises do little against energy-driven price increases. Finance Minister Makis Keravnos did not attend, and ministry permanent secretary Andreas Zachariades attended briefly but left before the session ended, saying inflation mainly stems from external factors such as fuel and energy and listing three types of response: immediate relief, income-raising reforms and measures to cut energy use.