Just when you thought it was safe to go back into the water, Donald Trump and Israel bombed Iran – and five weeks later consumers are increasingly feeling the pinch.
Irish inflation spiked in March to 3.6 per cent, versus a previous estimate by Davy that it would increase to 2.3 per cent.
Energy prices fuelled the surge, rising by more than 11 per cent in the month, putting pressure on households and businesses.
Admittedly this was before the Government introduced a range of measures to ease the impact of fuel increases, including a reduction in excise duties, to reduce the cost at the pumps for motorists.
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So inflation should ease, barring another turn of events in the Middle East – and that cannot be ruled out.
Before the Iran conflict, the price outlook for consumers was improving.
As reported by the Financial Times, in the weeks leading up to the war, big consumer goods groups including PepsiCo and Kraft Heinz had announced plans to cut prices to revive stagnant or declining sales volumes as consumers trimmed their spending.
Are Government's fuel measures betting on a quick resolution to the conflict in Iran?
PepsiCo said it would reduce prices by up to 15 per cent on certain snacks, with chief executive Ramon Laguarta citing the “stretched” budgets of low- and middle-income consumers.
At Kraft Heinz, where sales volumes have declined for five consecutive years, chief Steve Cahillane also outlined plans to lower prices, acknowledging they had become “unfriendly” to consumers.
Closer to home, the major grocery retailers had begun to cut the prices of a number of staples, notably butter and milk.
But cutting the price of beans or butter won’t compensate for a surge in energy bills, and the cold snap over the past few days will have forced people to keep their central heating on.
The Government will hope the measures it has introduced will ease the rate of inflation, and that the onset of milder weather will reduce the need for people to refill their home heating tanks. And that Trump ends the war.
