Another month, another rise in inflation. From a rate of 2.4 per cent to a current figure of 5.2 per cent, inflation has jumped almost three full percentage points in barely a year. Like something behind us viewed in a mirror, the job losses we experience today reflect the delayed impact of inflation rising from 1.6 per cent in 1999 to 5.6 per cent in the pre-election year of 2001 and the damage this did to our economy's competitiveness. In an almost exact rerun, inflation has risen from 2.5 per cent in 2005 to a rate which the Economic and Social Research Institute (ESRI) predicts will this year reach 6 per cent.
Extraordinary - and in the long run unsustainable - trends in the construction sector mask, for now at least, the impact that this might have on unemployment. So does a huge rise in public sector employment. But as thunder follows lightning, Ireland's latest bout of high inflation will raise the cost of living in what is already the most expensive country in Europe.
If the result is rising dole queues, the Government will be unable to escape the blame. What country - other than Ireland - accelerates the rate of inflation by hiking government spending and raising indirect taxes? What other government presides over the most rapid expansion in credit in the EU? And what other government has singularly failed to achieve the greater competition that is required to lower prices?
All economists agree that, interest rate increases aside, the rise in inflation in January reflects a strong increase in electricity prices. While a portion of this was justified in the light of oil price rises, the fact remains that the price of electricity in this country far exceeds that of the UK, due to the Government's slowness in liberalising energy markets. Other costs controlled by Government - healthcare and education for example - have consistently risen faster than the average rate of inflation.
And although interest rate increases are formally beyond our control, the Government cannot cite this as an excuse for what is happening. That the European Central Bank raised interest rates in December ought not, in principle, to have increased the year-on-year rate of inflation. This is because a similar rise in interest rates occurred a year before. But in the intervening period, Irish households, driven largely by mortgage borrowing, went €60 billion deeper into debt. The driver of this phenomenon - astronomically high house prices - has become an icon of the Government's failure across a whole range of policies, from planning to transport, to social housing and spatial planning. In calculating inflation, the Central Statistics Office has even had to increase the weighting it uses for housing costs.
By election time, some slight reduction in the rate of inflation may have occurred, leaving it at about 4.5 per cent. That will still be an appalling result. But perhaps, like the outcome of Ireland's recent soccer game against San Marino, Government standards are so low that it will trumpet even this result as a success.