The prices of so many goods and services are going up. Whether it is getting a bit of work done at the house, buying a bit of timber decking, or simply going out to the shops, it feels like prices are rising.
Anecdotally, when you talk to business people who source supplies in China, many of them will say their suppliers are telling them the price is on the way up.
It isn’t that long ago there was a serious economic debate about whether central bank policies around the world had cracked inflation.
Central banks have been effectively creating new money through quantitative easing and bond-buying programmes, but without seeing the expected rise in inflation that new money usually brings about.
Printing money but keeping inflation low seemed too good to be true.
Things have changed rapidly in that debate now, as more central banks around the world have begun pushing up interest rates in places like Australia, Poland, New Zealand in response to rising inflation.
In the US inflation is running at over 6pc. When unique cost of housing methods are factored out of the calculation, underlying inflation is closer to 9pc in the US. In Ireland it is running at 5.2pc. The overall Eurozone figure is just over 4pc.
The UK is seen as being just weeks away from an interest rate hike. Over in Frankfurt, where Philip Lane is the chief economist, the ECB is sticking firmly to its guns and is ruling out interest rate hikes before 2023.
This is looking increasingly out of kilter with other central banks, where rates are expected to rise sooner. The ECB analysis is based on the idea that this is an unusual inflationary spike generated by supply-chain issues which will be resolved.
Philip Lane’s view is that it will start to ease by the middle of next year, and is very much a temporary phenomenon. To say there is a lot at stake would be an understatement.
The euro has begun to fall against sterling and the dollar, on the basis that the ECB is likely to be an outlier in its approach to raising rates.
But what does this all mean for Irish consumers, borrowers, savers and businesses?
The impact of increases in the cost of living are pretty obvious. They represent an erosion of people’s buying power unless they can secure higher wages or lower taxes.
Last Thursday, industry group Food Drink Ireland put out the results of a survey which found that 42pc of firms had experienced 20pc or more cost increases in their raw materials. Nearly 70pc said energy costs had gone up by more than 20pc. Half of them said packaging costs were up 20pc or more.
To some extent, short-term supply issues caused by Covid are at the centre of these changes. But the jury is still out on how long it will take for that to improve in a way that is reflected in costs and prices.
International geopolitical factors around gas and energy prices don’t look like going away any time soon. In the Food Drink Ireland survey, all of the firms surveyed said global supply-chain constraints were a factor, along with Brexit (84pc), Covid impacts (96pc) and raw material shortages (96pc).
Higher input costs can give some businesses cover to sneak through higher prices. This only feeds on itself, as others in different sectors follow suit.
Higher wages will be a real factor in determining how long this lasts. Higher wages are a good thing, especially for those in lower-paid jobs. They appear to be rising across lots of sectors at all levels.
In the food and drink sector, half of the firms in the survey said they had seen labour costs rise by 5pc to 20pc.
By saying it will not move on interest next year, the ECB has stood out – and this has triggered a drop in the value of the euro in recent weeks. A lower euro will be good for exporters selling to the UK and the US, but it could push up the cost of imported goods for consumers.
Interest rates are at such low levels that rate rises would still be modest in historical terms. However, not moving on rates has raised concerns about overheating the economy.
Bankers who are unhappy about sustained low interest rates have warned that central banks need to move on rates. Keeping them low will keep borrowing costs low, and continue to fuel house-price growth.
Raising rates too soon could stifle what is still an early “post-Covid” recovery. Given how the pandemic is shaping up for the months ahead with possible fresh restrictions, it may be far too soon to talk about anything being post-Covid.
Nevertheless, when you look at the performance of the Irish economy, especially the strong performance of exports, Ireland looks set to continue with the wrong interest rate at the wrong time – as has been the case for much of the last 20 years.
We all know that gambling is big business. But who would have thought that bingo could become such a money-making machine?
Flutter Entertainment last week announced its acquisition of British online bingo operator Tombola, in a deal which places an enterprise value of £402m (€478m) on the company.
Played exclusively online, Tombola was set up and owned by the family of English entrepreneur Phil Cronin. For Flutter, it allows it to expand into what one analyst described as the “extremely recreational” end of the market.
Average revenue per active player at Tombola is 40pc lower than Flutter’s existing UK and Ireland online division, according to Davy Stockbrokers.
Latest filed accounts for the company show that in the year to April 2020 it generated turnover of £120m and a pre-tax profit of £12m.
But the firm has been on an incredible growth trajectory and may have benefited from the lockdowns of 2020 and 2021 – because in the financial year to April 2021, turnover hit £160m, which was up from £104m in just two years.
The optics for Flutter look good. Bingo is generally deemed as “safer gambling” but clearly the business is growing at a pace.
Tombola had no bank borrowings (creditors totaling just £20m) and £42.9m in cash at the end of April 2020. Based on a pro-rata profit margin, the company would have made around £16m pre-tax profits in 2021.
Flutter is paying quite a multiple for the growth story. No doubt the Flutter digital marketing machine will get to work on those bingo lovers.
Ireland’s odds of landing a massive new Intel project have just got longer. My money is on Germany to land the multibillion chip factory, especially after EU Commissioner Margrethe Vestager said the EU may approve state aid to fund new semi-conductor production in the bloc.
“Public support for funding gaps in the semiconductor ecosystem” is how it was described.
She made all the right noises about making sure this didn’t favour bigger countries, but we can expect some countries to get out the cheque books for projects.
Grants and other state aids are not the only factor in winning these projects – but if Germany wants it, I am sure they can make it happen.