Inflation warning as consumers brace for a wave of price hikes

Fears of a wave of post-pandemic consumer price hikes were raised after the announcement of a series of hikes.

electricity, gas, broadband, health ins urance, gasoline and diesel costs are all on the rise.

Bord Gáis Energy yesterday became the latest energy supplier to announce price increases, while telecoms provider Eir confirmed broadband and telephone prices for some of its consumers would also increase.

KBC Bank economist Austin Hughes said we are now enter a “noisy and nasty inflationary period”.

He blamed shortages of raw materials, problems with Brexit and higher costs for businesses in the event of a pandemic. The hope is that the price hikes won’t last, but that could change as workers start demanding wage increases.

Experts said the impact of Covid-19 has meant price pressures have been reduced so far.

But the rising costs of commodities, like crude oil, and the impact of Brexit are now pushing up prices for consumers.

Gasoline prices have increased by 20% this year, and diesel prices by 22% since June of last year.

Bord Gáis Energy has announced that it will increase electricity and gas prices from August. This is the second time this year that it has increased electricity prices.

It is the latest energy supplier to raise prices this year, with many announcing two increases. Electricity will increase by 11.6% and gas by 12.7%.

The combination of the two electricity increases this year will add over € 200 to annual bills.

Last week, Electric Ireland, which has more than one million customers, said its price of electricity s would increase next month, adding € 100 to annual electricity bills.

Eir increases its broadband and telephony prices for some of its consumers by a multiple of the rate of inflation.

The 8 pc increase amounts to an additional € 6 per month, which will add € 72 per year to the average bill.

This year health insurance has increased, heating oil, rents and house prices have increased at the rate of the last time during the Celtic Tiger.

The pent-up demand after months of foreclosure is creating increased spending that also puts pressure on prices.

Statisticians say that over the past year the prices of alcohol and food consumed in licensed establishments, restaurants and cafes have increased.

There has also been an increase in the cost of tobacco products and higher prices for wines and spirits sold in supermarkets and unlicensed.

European Central Bank director Christine Lagarde called the price spikes “hits”, pointing to a combination of base effects, transient factors and rising energy prices.

But consumer advocates have said household budgets for many are under enormous pressure.

Consumers Association chairdresser Michael Kilcoyne said raw material costs were rising.

This translated into price increases for consumers.

“The prices of goods and services for consumers are skyrocketing. This puts enormous pressure on families.

“Take gasoline. It is now 1.53 € a liter. Last year they would have paid you to take it.

The latest inflation figures from the Central Bureau of Statistics show that the consumer price index rose 1.7% in May. But the numbers expected today for June should show an even bigger increase.

A recent study found that prices in Ireland for consumer goods and services are the second the highest in the EU.

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