CONSUMERS are cutting back on spending to cope with soaring price increases.
Experts say this will have a domino effect on the broader economy at a time when companies are trying to recover from the pandemic.
Seeking a raise is seen as a core solution by only a minority of people, with just one in ten people out of 1,200 planning to ask for a raise, according to a survey by financial consulting firm Taxback.com.
The survey found that nine out of ten people felt inflation, which is at a two-decade high.
Rising home energy costs and sky-high petrol and diesel prices are considered the biggest threat to household income.
A spending crackdown is seen as the main way to deal with inflationary pressures.
A separate study by retail research group Kantar found consumers are facing an extra €330 in annual grocery bills this year.
The Taxback.com survey found that consumers report big increases in the price of groceries, alcohol and tobacco.
Respondents to the survey also said they see the cost of car insurance increasing.
About 47 percent of respondents to the survey said the engine cover is now more expensive.
This is at odds with figures from the Central Statistics Office, which show a drop in car premiums that the insurance industry has highlighted.
About 45 percent of the survey participants also said that health insurance is more expensive.
Taxback.com director Barry Cahill said: “The survey suggests that spending less is by far the most popular action people want to take to stem the impact of rising prices.
“This will impact the broader economy, especially at a time when businesses are trying to recover from the pandemic.”
The survey found that a quarter of respondents said they would like to save more, with one in ten believing they will seek financial help and/or advice from either a friend or family, a lender, or a financial professional.
“Interestingly, seeking a raise is only seen as a core solution by a minority of people, with only 1 in 10 planning to request a raise,” Mr Cahill said.
He said the rise in prices is putting pressure on households, students and businesses, forcing them to find ways to save.
Inflation puts pressure on smaller companies to raise their prices to consumers.
This, in turn, puts them at risk of losing customers to larger, larger-margin companies who may be able to afford to pass on a little less pain to consumers,” Mr Cahill said.
Inflation is currently 5.6 percent in Ireland, the biggest price increase in 21 years.
https://www.independent.ie/business/personal-finance/consumers-reacting-to-inflation-surge-by-spending-less-41613641.html Consumers are reacting to the surge in inflation by spending less