Hefty price hikes hit consumers hard as inflation soars to 5.1%

CONSUMERS are having to stomach hefty price rises almost every time they open their wallet or purse, according to the latest Central Statistics Office (CSO) figures.

Inflation rose to 5.1% last month as prices in 10 of the CSO’s 12 main household spending categories experienced rises over the last year.

Last night consumer champion Eddie Hobbs said the main reasons for the increase were rises in the kind of charges controlled by the State.

He suggested household bills like gas and electricity as well as health and education costs have pushed annual price rises over the 5% mark.

“There are large parts of the Irish economy which are not competitive and if they were then we would not be seeing such large increases,” he said.

“The largest increases in costs are coming through the State sector where there is no competition. You are not seeing the same kinds of rises in clothing or general groceries because the markets for these are competitive.”

Mr Hobbs said increased competition in the domestic gas and electricity markets, for instance, would bring dividends in the form of lower bills for ordinary consumers.

Looking at all kinds of household expenditure the CSO found only two areas where consumers are benefiting from lower prices; clothing and household furnishings.

Everything else — from postage stamps to taxi fares and dental treatments — went up, pushing inflation to levels last widely seen in 2002.

Mortgage interest rates, household bills and local authority charges are, when combined, 22.8% more expensive than they were this time last year.

On mortgages alone interest charges have risen by an eye-watering 47.5% in a year.

For those who choose to rent their payments are up 9.9% while general household maintenance and repairs charges are up 5.3%.

Gas and electricity bills are, respectively, 20.5% and 12.6% costlier than in 2006 while those opting for solid fuel are paying out an extra 10.6%.

The cost of travelling is up 12.2% overall, with the main culprits the 12.4% hike in taxi fares.

In schooling, the costs of sending children to primary school are up 9.2% and to secondary school 8.2% while a university education is 5% dearer.

Householders, too, are also seeing rises, albeit small, in the most sensitive area of their pocket — their weekly shopping.

In the 12 months to March, food prices were up 1.1%. This rise was partly off-set by falls in tea, coffee and soft drinks, bringing the overall rise to 0.8%.

However, the Government can take little cheer from the food figures as widely-predicted deep cuts in food bills have failed to materialise.

The Groceries Order controls on food prices were lifted exactly a year earlier with commentators suggesting bills would fall by €1,000 a year.

The latest inflation figures show slight falls in former Groceries Order shopping items but increases elsewhere have obliterated the benefits to consumers.

Price hikes

Postage: up 10.4%

THESE are the crippling rises that are hitting you in the pocket the hardest:

Mortgage interest: up 47.5%

Gas: up 20.5%

Electricity: up 12.6%

Rail, road and air fares: up 12.2%

Postage: up 10.4%

Primary education: 9.2%

Secondary education: 8.2%

Car and vehicle maintenance: up 6.6%

Doctors, dentists and medicines: up 5.2%

Eating and drinking out: up 4.2%