CONSUMERS are facing months of price hikes, with food now rising along with energy to record levels.
however, the fact that the Houses of the Oireachtas will rise for the summer recess today means that it will
the autumn before new government measures are introduced to relieve some of the pressure.
Households will see the cost of living crisis worsen as prices rise further in the coming months.
The warning comes after official figures showed that prices rose by 9.1 pc in the period up to June. rose, the fastest rate of price increases in nearly 40 years.
Food inflation is now close to 7 percent, electricity prices are up 40 percent and the cost of heating oil has more than doubled.
The news raises fears that consumers will curb spending, a move that could send the economy into a slump.
This would negate the current expectation that this country can avoid a significant slowdown in the coming year.
Meanwhile, warnings have been issued that skyrocketing inflation is eroding families’ mental health.
Fianna Fáil TD John Lahart told the Dáil that some families are now reluctant to spend money on new shoes, an indication that not everyone is doing well.
There is so much negative economic talk that people are concerned about spending, he said.
Michael Kilcoyne, head of the Consumers’ Association, said the higher the prices, the more the government would get in VAT payments.
He said some people would eventually have to choose between buying food and heating their homes when the weather deteriorated.
No one got wage increases that matched the level of price increases. This meant there was an urgent need to cut taxes, he said.
Taxback.com director Barry Cahill said the pressure on the cost of living was worrying workers.
“Employers are looking for ways to help their workforce by caring for their mental and financial well-being wherever possible through workplace initiatives and programs,” he said.
He said spending less was the most common measure people said they planned to curb the impact of runaway prices, which would have a knock-on effect on the broader economy.
Mr Cahill said that when his company informed its taxpayer database, nine out of ten people reportedly felt they were driving up fuel costs to home and transport since the beginning of the year.
Eight out of ten said they had felt the surge in their alcohol, tobacco and food bills.
Goodbody Stockbrokers economist Dermot O’Leary warned inflation would hit 10 percent next month. This month, the Central Bank forecast that inflation could spike above 10 percent in the coming months.
Mr O’Leary said the latest inflation figures show that the mix of price pressures is changing, with food inflation now a major issue alongside increases in energy costs.
“In terms of price increases, we still have a little bit to go and inflationary pressures are mounting,” he added.
The risk, he said, was that inflation would increase
stubbornly now not only energy costs rose.
Figures from the Central Bureau of Statistics show that food prices rose by 6.8 percent in the past year.
The prices of flour, pasta, chicken, beef, fish, butter, margarine, milk and fruit
are all rising in double digits.
Overall prices have risen at the fastest pace in nearly four decades, putting pressure on personal finances.
Households are under pressure as prices have been rising year on year since April last year.
This has led to an annual inflation rate of 5 percent or more
ed every month since October last year.
The costs of energy and motor fuel continue to rise.
In the past year, electricity prices rose by 41 percent, while gas prices rose by more than 57 percent.
Home heating oil has more than doubled in price, up 115 percent over the past year.
The cost of driving has also risen sharply.
Petrol prices have risen by 44 percent, while diesel prices at the pump have risen by 51 percent.
Airfares have risen by an average of 38.4 percent since June last year.
CSO statistician Anthony Dawson said a failure
of prices showed that in
The diesel price in May this year was € 1.93 per litre, 56.5 liters more than in May last year.
Petrol, for €1.86 per litre, wax
up 38.3c between may this
year and the same month last year.
The national average price for bread – an 800g pan of white slices – rose by 13.9 cents in the year to May.
A brown cut pan of the same size had risen 16.1c in the year.
The price per 500 g of spaghetti rose by 18.3 cents in the year, while the average
price for 2.5 kg of potatoes fell by 19.3 c.