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Food prices follow fuel and electricity bills as inflation surges to its highest level in 22 years

Food prices are starting to rise due to rising fuel, utility and airfare costs.

Consumers have been warned that inflation will continue to rise in the coming months.

It hit 7 percent in April, a high not seen in 22 years.

Central Bank of Ireland Governor Gabriel Makhlouf said the rise in inflation meant interest rates would need to be raised, a move that would put pressure on thousands of homeowners.

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Speaking to business leaders in Dublin, Mr Makhlouf said: “We have reached the point where we need to act in the Governing Council.”

Financial experts expect three European rate hikes in the coming months, a move that could cost variable and tracker mortgage holders about €1,000 more a year to service their home loans.

The inflation index published by the Central Statistical Office confirms rising prices for household energy, petrol and diesel.

And there are signs that goods and services that have not seen price increases before are now seeing sharp price increases.

Sharp price increases put a heavy strain on disposable income, as wage increases do not keep pace with the rate of inflation.

Consumer prices rose 9.3 percent in April.

April CSO numbers show double-digit increases in flour and pasta and sharp rises in milk and meat prices.

Overall, food prices rose by 3.5 percent last year.

CSO statistician Colin Cotter said the national median price for a large (800g) sliced ​​white skillet rose 12.9 cents in the year through March.

The same size brown pan with slices was up 22.2 cents over the year.

The national average price for a 50cl can of lager to take away was €2.16, an average of 32 cents higher than in March last year.

Beer prices have risen by 12 percent. A 70cl bottle of vodka to take away for €23.90 increased by €3.18.

The CSO said diesel prices have risen 40 percent over the past year and gasoline prices have risen 24 percent.

The statisticians record diesel prices at 1.95 euros per liter and petrol at 1.93 euros per liter.

This means that diesel is up 61.3 CA liters and petrol is up 50.4 cents per liter in the year to March.

Flight costs rose 93 per cent as international travel reopened after Covid restrictions.

The war in Ukraine has led to a 29 percent increase in electricity and a 50.5 percent increase in gas over the past year.

Heating oil costs have skyrocketed 90 percent, while solid fuels, which include wood, peat and coal, are 25 percent more expensive than a year ago.

Rents rose by 9.3 percent last year.

Economists at the Economic and Social Research Institute expect annual inflation to peak at between 8 and 8.5 percent this summer before falling.

KBC Bank economist Austin Hughes said inflation is likely to rise somewhat in the coming months.

He said an 8 percent rate would represent a high not seen in four decades.

“Stubbornly high energy costs and ongoing global supply shortages due to Covid-related shutdowns in China mean easing is likely to be quite slow,” Hughes said.

And a likely further rise in food prices coupled with the prospect of rising interest rates will put pressure on the median cost of living this year, he said.

Price increases between March and April were driven by heightened price pressures in areas such as clothing, likely due to the strength of sterling, and increased transport costs.

Supply chain problems drove car prices up 12.7 per cent annually, while Easter holidays may have contributed to a 32 per cent rise in air fares in the month of April, making them 93 per cent higher than in April last year, Mr Hughes said .

https://www.independent.ie/news/food-prices-follow-fuel-and-utility-bills-as-inflation-soars-to-highest-in-22-years-41644926.html Food prices follow fuel and electricity bills as inflation surges to its highest level in 22 years

Fry Electronics Team

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