Fears rising cost of raw materials will lead to post-pandemic surge
Fears of a flood of post-pandemic consumer price rises have been raised after a string of hikes were announced.
Electricity, gas, broadband, health insurance, petrol and diesel costs are all rising.
Bord Gáis Energy became the latest energy supplier yesterday to announce price hikes, while telecoms provider Eir confirmed broadband and phone prices for some of its consumers would also increase.
Economist with KBC Bank Austin Hughes said we were now heading into a “noisy and nasty period of inflation”.
He blamed commodity shortages, Brexit issues, and higher costs for business in a pandemic. The hope is price rises will not last, but this may change as workers start demanding pay rises.
Experts said the impact of Covid-19 had meant price pressures had been muted up to now.
But a rise in the costs of raw materials, such as crude oil, and the impact of Brexit were now pushing up prices for consumers.
Petrol prices are up 20pc this year, with diesel prices up 22pc since June last year.
Bord Gáis Energy has announced it is increasing electricity and gas prices from August. It is the second time this year it has raised electricity prices.
It is the latest energy supplier to hike its prices this year, with many announcing two rises. Electricity will rise 11.6pc, with gas up 12.7pc.
The combination of the two electricity rises this year will add more than €200 to annual bills.
Last week Electric Ireland, which has more than one million customers, said its electricity price s would rise next month, adding €100 to annual electricity bills.
Eir is increasing its broadband and phone prices for some of its consumers by a multiple of the inflation rate.
The 8pc rise works out at an extra €6 a month, which will add €72 a year to the average bill.
This year has seen health insurance rises, home-heating oil increases, rents surging and property prices increasing at rates last experienced during the Celtic Tiger.
Pent-up demand after months of lockdown is creating a surge in spending that is also putting pressure on prices.
Statisticians say that over the last year prices have risen for alcohol and food consumed in licensed premises, restaurants and cafes.
There was also a rise in the cost of tobacco products and higher prices for wine and spirits sold in supermarkets and off-licences.
Head of the European Central Bank Christine Lagarde has dismissed the price surges as “blips”, pointing to a combination of base effects, transitory factors and rising energy prices.
But consumer advocates said household budgets for many were coming under huge strain.
Consumers’ Association chairman Michael Kilcoyne said raw material costs were surging.
This was translating into price jumps for consumers.
“Prices of goods and services for consumers are going through the roof. This is putting huge pressure on families.
“Take petrol. It is now €1.53 a litre. Last year they would have paid you to take it.”
The latest inflation figures from the Central Statistics Office show the consumer price index rose by 1.7pc in May. But figures due out today for June are expected to show an even larger rise.
A recent study found that prices in Ireland for consumer goods and services are the joint second highest in the EU.