Consumers struggle as inflation soars 3%

PRICES have risen the most in three years as consumers were forced to shell out more for food and clothes.

The price of petrol, shoes and insurance also rose last month at a time when many consumers are struggling to make ends meet.

Figures from the Central Statistics Office showed that the cost of living has soared 3% in the last year. Last month it was up 0.9% — the last time there was such a large hike was in March 2008.

Goodbody economist Juliet Tennent said discretionary consumer spending will now come under further pressure.

“With the Irish consumer facing the headwinds of an austerity programme, a weak labour market and interest rate hikes from the ECB, upward pressure on inflation will impact real incomes and hit consumer spending further.”

Food prices rose 0.1% last month and are up 1.1% in the year. Clothing costs rose 4.2% in March, while shoe prices were up 3.3%.

One of the big drivers of the increase last month was mortgage interest, which was up almost 7% and has increased more than 28% in the year. This cost is expected to balloon with the announcement by the European Central Bank that interest rates are to go up by 0.25%.