Irish Inflation Hits 4.8%

The latest figures from the Central Statistics Office show that the annual rate of inflation has increased to 4.8 per cent in October, up from 4.6 per cent in September. According to Richard Bruton our inflation rate is now growing at a rate 38% faster than in the rest of the Eurozone. Inflation in services is running 110% faster in Ireland than in the rest of the Eurozone.

Housing, water, electricity, gas and other fuel prices have risen 17.4 percent since October 2006. The cost of mortgages has risen by 34.6 percent over the past year.
Education costs rose 5.2 percent over the previous 12 months, including a 3.9 percent jump over the past month reflecting the start of a new academic year. Food and nonalcoholic beverage prices rose 4.4 percent, including 1.4 percent in the past month.

Bread, flour, milk, butter, rents, electricity all show price increases of more than 10% in the last 12 months.

The Government has turned an anticipated surplus of €1.8 billion into a deficit of €800 million.
It has failed to control public expenditure. Spending is growing at 17.5% - three times the 5.5% rate of growth of revenue. This ensured its re election. It is a major influence on inflation. The Government has sought to blame external factors. External factors are partially responsible however State services and stealth taxes are also major drivers in the inflation rate.

The high inflation rate is impacting strongly on the competitiveness of manufacturing industry.
Today Waterford Wedgwood confirmed that there would be large job losses at Waterford Crystal. It is anticipated that up to 500 jobs may go. Undoubtedly the weakness of the dollar against the Euro is a major factor also. Today it was announced that the Erin's Food plant at Thurles would close with the loss of 95 jobs. There are fears that between 80 and 100 jobs will be lost at the Boston Scientific plant in Galway.
Much nonsense is spouted by Government Ministers about high-value, knowledge-led jobs as the way forward for Ireland. There is a certain validity in this assumption. However countries such as India and China will increasingly challenge Ireland for such jobs.
The rosy picture of the economy- painted by Government Ministers during the General Election campaign - has quickly dissipated.