Up and up: inflation hits 5pc with worse to come
The rising cost of fuel has contributed to inflation. Photo: Mark Renders/Getty Images
Friday July 11 2008
THE rate of inflation rose again last month to 5pc and economists have warned the cost of living will increase further when energy prices and mortgages increase later this year.
The Central Statistics Office (CSO) reported yesterday that the biggest monthly increase in prices -- 2.1pc -- came in the transport sector, due to higher air fares and rising petrol and diesel prices. Air fares were up more than 11pc from May.
Higher mortgage repayments and increased prices for hotels and other accommodation also contributed to the rise in inflation.
Last night the Opposition lashed out at the Government, warning that low-income families are being forced to bear the brunt of the increases.
Fine Gael's finance spokesman, Richard Bruton, described the absence of a government anti-inflation strategy in light of ever-rising prices as 'madness'. "The latest surge in consumer prices is depressing news for families and businesses with prices rising the way they are and another increase in interest rates still to come," he said.
Strategy
"It is now essential that the Government introduces an anti-inflation strategy which would give some confidence to negotiators now embarking on difficult pay talks."
He said that it is "particularly disconcerting" to see food prices in Ireland are rising faster than the UK and the Eurozone, adding that the depreciation in sterling is not being passed on to consumers.
Labour's Senator Brendan Ryan said there are now real fears that the upward trend in inflation will continue.
"All these increases represent a significant proportion of the typical families' outgoings," said the party's spokesperson on Consumer Affairs.
"They are in products and services that represent the essentials of life, where there is little room for discretionary spending."
The price of water, electricity, gas and other energy products have risen 11.1pc since June 2007, while food prices have increased by 7.3pc.
Bank Governor John Hurley said trying to match wages to the rise in the cost of energy, mortgages and imported food, risked repeating the mistakes of the past, from which the economy had taken so long to recover: "We cannot compensate for commodity price rises over which we have no control."
- Edel Kennedy
