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UNDER PRESSURE Irish consumers struggle as cost of goods rises 7 per cent in 12 months as ECB plans interest rate hike

The cost of goods has risen by 7% in the last year, hitting Irish consumers hard.
The ECB is expected to hike interest rates in July to battle inflation, adding to the burden on households.

The Consumer Price Index, which tracks average household costs for goods and services, climbed 7% in the year to April, according to the Central Statistics Office.


UNDER PRESSURE Irish consumers struggle as


This is the highest yearly CPI increase since November 2000, when inflation was 7%. Major increases were in transportation (+18.9%) and housing (+17.1%).

According to CSO statistician Colin Cotter, “the annual change in transport costs reflects a rise in the cost of diesel (40.1%), petrol (23.9%), automobile purchases (11.7%), and airfares (92.7%).

With electricity up 27.8%, gas up 50%, liquid fuels (home heating oil) up 90.1 %, and solid fuels up 24.7 %, rising energy costs are reflected in rising housing, water, and other fuel expenditures.

Only March-April saw a 0.9% rise in CPI.


UNDER PRESSURE Irish consumers struggle as


Clothing and footwear (+3.9%), communications (+2.9%), restaurants and hotels (+1.7%), and transportation (+1.7%) saw the biggest rises in April.

CBI governor Gabriel Makhlouf has joined the chorus of policymakers predicting an ECB interest rate hike in July, the first in a decade.

“The period of negative rates is coming to an end,” Mr. Makhlouf added. The path to normalization is less apparent, as is when rates should start rising and stop rising.

According to Taxback.com’s Barry Cahill, increased prices are affecting the wider economy.

“A household budget cut will have a ripple impact on the economy,” he warned.

“Thousands of Irish households are struggling to cope with rising living costs and it is unclear how much longer they can bear.”

Pay demands are inevitable, according to Excel Recruitment CEO Barry Whelan.

“With this level of inflation, employee compensation demands seem probable this year,” he said.

“However, several industries, including transportation, have already witnessed large pay rises.”

Read More: The Complete Guide to the Cost of Transporting Vehicles