Inflation is set to ease over the course of the year and household finances will improve.
That's the prediction from the Central Bank in its latest quarterly economic bulletin.
Its forecasting inflation will ease back to around 5% and real household incomes will grow.
The Bank's Director of Economics and Statistics Robert Kelly says while unemployment will remain low, businesses will find it even more challenging to recruit staff.
"We see new highs in terms of the numbers employed, at 2.5m people. Unemployment is at 20 year lows.
"The ratio of people available to work relative to demand is at half the rate it was pre pandemic.
"Overall we're facing a very strong labour market. When we look at what it means for firms, over 40% of firms says the main factor limiting business activity is labour supply."
