The general rate of inflation is beginning to ease in Ireland and today experts are warning households that this does not mean prices will reduce.
In fact, it simply means prices will begin to rise at a slower rate than before with more price hikes forecast in several key areas over the coming months.
Among the areas where increases are expected are petrol, diesel, alcohol, streaming services, and transport services – putting further pressure on hard-pressed households.
Meanwhile, the experts at bonkers say “residential gas and electricity prices in Ireland remain at record highs with only a small reprieve likely over the coming months while there are renewed concerns over food prices.”
Here’s all of the predicted changes coming down the line, according to Bonkers.ie:
Motorists
Motorists will soon see the restoration of excise duty on petrol and diesel in September and October which will add 15 cent to a litre of petrol and 11 cent to a litre of diesel.
There will also be a €7.50 increase in the carbon tax in the October Budget which will add around another 2 cent to a litre of petrol and diesel.
This will add around €150 to €200 extra per year to the average driver’s fuel costs in total.
Heating
The carbon tax increase will also see around €17 added to the average annual gas bill and around €19 to the fill of a 900-litre oil tank.
This means households will soon be paying around €130 in total in carbon tax on their gas costs and around €142 in total for their oil.
The implementation of the carbon tax increase on home heating fuels may be spared until next May though.
Drink
Diego has announced another 4 cent increase in the price of a pint of Guinness as well as its other brands like Carlsberg and Smithwick’s.
This comes on top of the 12 cent hike introduced in February.
Food
According to the CSO, food inflation is still running at over 10% a year having hit a high of over 13% a few months ago.
Prices are still rising month on month – just at a lower rate.
However, Russia’s recent decision not to extend the Ukraine grain deal has stoked worries about global food supply chains and prices once again.
Prices for grains and oilseeds have already risen in response to the news that Russia will suspend its participation in the deal.
And this will likely lead to higher prices for staple items such as bread, cereals and pasta over the coming months.
Transport
Although bus and rail fares have largely come down over the past year on the back of Government intervention, it isn’t all good news.
From today Bus Eireann will hike the price of its Expressway coach services by 5%.
Streaming/communications
Spotify has announced that it’s increasing the cost of its individual and duo plans by €1 a month to €10.99 and €14.99 respectively.
Meanwhile, Netflix is clamping down on password sharing meaning many will have to fork out for their own subscription starting from €8.99 a month.
This means some music and movie lovers may need to fork out an extra €120 a year.
Air fares
The recent bad weather means many are probably thinking of booking a last-minute getaway.
But airfares are up over 34% compared to last year and it appears the era of ultra-cheap travel is over – for good potentially.
The inability (and in some cases refusal) of airlines to add capacity post Covid means many are still operating a reduced service.
“All forecasts are for prices to continue to increase over the next year”
Speaking about the results of the research, Daragh Cassidy, head of communications at bonkers.ie says:
“Although the general rate of inflation is expected to fall over the coming months this doesn’t mean prices will necessarily drop. It just means prices are increasing at a slower pace. This is a key point a lot of people don’t get. Unless we see outright deflation, things aren’t getting any cheaper.”
He went on to say that although the rate of inflation fell to 6.1% in June from 6.6% in May, prices still rose a huge 0.8% over the month.
“And all forecasts are for prices to continue to increase over the next year or so in most sectors. So really the cost-of-living squeeze isn’t going to get much better.
“Petrol, diesel, alcohol, airfares, and streaming services are all going up in price over the coming weeks, while there will be upward pressure on food prices again following Russia’s decision not to extend the Ukraine grain deal.
“What’s more, gas and electricity prices remain at record highs. We’ve seen no price drops from any of the main suppliers this year.
“While I’m hopeful we might see some small decreases before the end of the year, it’ll still leave our prices way, way above normal and unmanageable for some people.
“And we’re still not sure what energy supports the Government will provide this year.”
