There you have it. Analysts are certain we have hit a peak in the current inflation cycle with the rate resting at 7 per cent at the end of November.
This time they may well be right, although once again they underestimated the growth in the rate over that month, giving little cause for confidence. The upper limit of expectations was 6.9 per cent with some wanting the rate to stabilise at October's 6.8 per cent.
Still, it is true that a lot of the inflationary inputs from last year - including the sizeable jump in duty on tobacco - will fall out of the index going forward. A recovering euro and falling interest rates should help. And then there is the impact of the cut in VAT, which should prove beneficial.
The fly in the ointment, however, may be the backlash from the emergency measures taken last year to artificially keep the inflation figure down.
How long before the VHI and other State controlled bodies whose rates were frozen last year come looking for catch-up increases? More immediately, how long before the publicans come looking for a sizeable rise in their frozen prices?
