Mortgages and fuel costs drive inflation to highest rate in three years
THE cost of living -- driven by soaring mortgage and fuel costs -- is now rising at the fastest rate in three years, new figures reveal.
The latest Consumer Price Index from the Central Statistics Office shows prices increased by 0.9pc in March alone and are 3pc higher than the same month last year.
This is the exact reverse of this time last year when the cost of living was still falling by more than 3pc a year.
Families have been hit with savage increases in mortgage repayments, fuel and health costs at a time when incomes are already being squeezed by unemployment, wage cuts and higher taxes.
Cash-strapped consumers are coping with the highest inflation rate since October 2008 -- and that's before banks pass on yesterday's 0.25pc ECB interest rate hike that will add another €45 a month to the cost of a €300,000 mortgage.
Mortgage interest repayments have soared by nearly 30pc as a result of hikes for variable-rate customers, while home heating oil is a massive 40pc more expensive than a year ago and petrol prices are up almost 17pc.
Food and beverage prices have seen a relatively modest increase of 1.6pc in the last year.
But some products such as soft drinks and mineral water, cocoa, flour and butter have seen double-digit increases.
Alcohol is 1.7pc cheaper than a year ago, while the cost of clothes and shoes rose by 4pc as new season stock came into the shops. However, they are still more than 2pc cheaper than a year ago.
Rising prices are putting unsustainable pressure on households, the Irish Congress of Trade Unions (ICTU) warned.
"With ongoing rises in oil and food prices, inflation is now taking a strong hold in Ireland. In that context, today's interest rate rise by the ECB is very unwelcome," ICTU economic adviser Paul Sweeney said.
"There is a limit to the burden of austerity that any society, or household, can tolerate."
The Irish Small and Medium Enterprises Association (ISME) warned it would get worse over the coming months.
"Today's figures are particularly dreadful when consideration is given to the uncertainty of future oil prices and imminent increases in interest rates, which will push inflation to unbearable levels over the next number of months," ISME chief executive Mark Fielding said.
Employers group IBEC said rising inflation would eat into consumers' disposable income, weakening domestic demand.
Housing charity Respond said more than 80,000 families were already in difficulties with their mortgages -- and even more would go into arrears because of the latest interest rate increase.