| 3°C Dublin

Living costs now at Celtic Tiger levels


(Stock photo)

(Stock photo)

(Stock photo)

The cost of living has returned to Celtic Tiger levels despite households seeing only marginal income gains in the last 10 years.

A leading economist has warned of a heavy tax burden on the squeezed middle - with the income tax take increasing by more than 72pc since the boom.

A Sunday Independent analysis of Central Statistics Office (CSO) figures shows consumers are making significant savings on grocery and clothing bills - but these are wiped out by the rising cost of insurance and household spending. Steady price growth, despite low inflation, means the cost of living is now on a par with the year-long period before the Celtic Tiger ended. Low wage growth since 2008 makes this harder for families to cope and explains why many are not experiencing a recovery.

"For a decade there has been very little in the way of wage growth. Over that period the personal tax burden has increased dramatically," says economist Jim Power. "Back in 2006 we had roughly the same number of people working in the economy as we had in 2018. However, back in 2006 they paid €12.4bn in income tax, 27.2pc of the total tax take.

"In 2018, roughly the same number of people working paid €21.4bn in income tax and accounted for 38.2pc of the total tax take." An analysis of CSO figures shows household insurance costs have doubled, with rises in health bills, electricity and fuel spending eating up family incomes.

Sunday Independent