Two announcements today will not do anything to quell fears for the economy, as new figures show inflation in the Irish economy unexpectedly rising to 8.5% in February – while the ECB hiked interest rates up to 3%.
According to the Central Statistics Office the official measure of inflation, the consumer price index (CPI), reversed the trend of the last three months by showing a 8.8% rise in prices in the 12 months to end of February.
Data from the CSO showed prices on average rose by 1.6 per cent between January and February.
The latest data indicates the cost of most goods and services – from restaurants, hotels and airfares to clothing, footwear and food – rose last month.
The CSO said that significant hikes in the price of Housing, Water, Electricity, Gas & Other Fuels were recorded, while Food & Non-Alcoholic Beverages rose by 13.1%.
“Increased energy costs are reflected in the yearly growth of Housing, Water, Electricity, Gas & Other Fuels, particularly in electricity (+62.7%), gas (+86.1%), liquid fuels (home heating oil) (+17.3%), and solid fuels (+46.1%),” the CSO said.
Sugar was up +30.8%, while frozen fish soared by 26.9%, and fresh whole milk was up almost 27%, and eggs and butte were up 22%
The bad news on inflation came as the Europan Central Bank also hiked up interest rates another 50 points to 3% – bad news for borrowers and mortgage holders.
A “large majority” of ECB policymakers backed the European Central Bank's decision to go ahead with a planned half-point increase in interest rates says President of the Christine Lagarde https://t.co/AscMKS8YMJ pic.twitter.com/IAifhKWKAI
— Bloomberg TV (@BloombergTV) March 16, 2023
The ECB hike came amid major turbulence on financial markets with fears for European bank Credit Suisse after the collapse of California’s Silicon Valley Bank.