Inflation soars to two-year high

INFLATION hit a two-year high last month as higher oil prices and heftier mortgage burdens began to bite, new figures show.

The Central Statistics Office (CSO) said yesterday the annual inflation rate soared to 3% in September, up from 2.3% in August. Average prices rose by nearly 1% in September alone.

Economists said the increase was higher than had been expected and presented a danger that the economy would become caught up in a spiral of higher wage demands and higher prices. Some warned of the threat of higher interest rates and higher mortgage payments if the European Central Bank moved to counter inflation across Europe with a rate hike in the near term.