Irish households are facing into the biggest cost-of-living squeeze in nearly four decades amid another significant jump in the official inflation rate.
Figures from the Central Statistics Office (CSO) show consumer prices here rose by an average of 9.1 per cent in the 12 months to June – the fastest rate of price growth seen in the Irish economy since 1984 – and up from 7.8 per cent in the year to May.
The main drivers of higher living costs were energy, fuel and food. Electricity, gas and other fuels were up over 22.5 per cent year-on-year. Within this category, electricity prices were up 40.9 per cent, while gas prices rose by over 57 per cent. The figures showed the cost of home heating oil has soared by 115 per cent since this time last year.
The cost of motoring has also risen sharply, with petrol and diesel prices up 43.8 per cent and 50.7 per cent respectively. Airfares were up on average by 38.4 per cent since June last year.
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Prices have been rising on an annual basis since April 2021, with an annual inflation of 5 per cent or more recorded each month since October last year. The Central Bank warned last week that headline inflation is likely to rise above 10 per cent in the third quarter before falling back later in 2022.
The latest figures from the CSO show prices rose by 1.3 per cent between May and June this year.
Another driver of headline price growth was food, with prices across the board up 6.8 per cent on this time last year. Within the food category, milk, cheese and egg prices were up by over 10 per cent, while bread and cereals were up by 7.6 per cent, and the cost of meat up by 9.8 per cent.
Alcohol and tobacco prices were up by an average of 8.2 per cent, a reflection of generalised price growth and the adoption of new minimum unit pricing for alcohol.
Prices in restaurants and hotels, meanwhile, rose by 7 per cent due to higher prices for alcoholic drinks and food consumed in licensed premises, restaurants and cafes and an increase in the cost of hotel accommodation.
The cost-of-living squeeze is expected to see household bills rise by an average of €3,000 this year.
The dramatic spike in domestic energy bills will see the cost of gas and electricity climb by around €1,000 year on year while a typical motorist who drives around 16,000km a year will see the cost of fuel climb by a similar amount, with grocery inflation adding €800 to annual costs.
And this is before higher mortgage costs come into play. The European Central Bank has signalled a sequence interest rate rises from later this month.
“Today’s report sets out in black and white the financial strain weighing heavily on the shoulders of Irish households at the moment,” Barry Cahill from consumer website Taxback.com said.
“People are besieged with the impact of inflation on day to day living costs and it’s uncertain how much more they can withstand,” he added.
