Surging energy prices drove Irish inflation to a three-year high of 4 per cent in October, up from 3.8 per cent the previous month.
The latest readout of annualised price growth comes amid renewed US strikes on Iran and in advance of pivotal US midterm elections that could dictate the course of American foreign policy.
The Central Statistics Office’s Harmonised Index of Consumer Prices indicated that prices rose at an annualised rate of 4 per cent in the 12 months to October and by 0.5 per cent month-on-month.
The main driver was energy prices, which rose by 4.5 per cent in the month and were up by more than 18 per cent since October 2025.
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Motorists have been the worst hit by the latest spike in oil prices, with petrol and diesel prices breaching €2 and €2.15 a litre respectively in many forecourts. Before the Iran crisis, both fuels averaged about €1.70 a litre.
The increase in food prices was more muted. They rose by 0.1 per cent month-on-month and by the same amount in annual terms.
There is typically a lag time before rising energy costs translate into higher food prices.
Eurostat will publish flash estimates of inflation from the euro zone as a whole on Wednesday.
They are likely to heavily influence the European Central Bank’s next move on interest rates, with markets anticipating another quarter-point rise in December.
The ECB paused its run of rate hikes at last week’s October meeting.
Frankfurt has raised rates twice in the past five months as it combats the surge in inflation from energy prices.
Although there is concern that euro zone inflation may soon climb above 4 per cent, double the ECB’s target rate, rising bond yields are acting as a counterweight, allowing the bank to pause its monetary tightening at least for now.
Kate English, chief economist at Deloitte Ireland, said: “The lag between fuel price increases and a more expensive food shop has not yet emerged in the latest inflation figures, with food prices increasing by 0.1 per cent in the last year.”
However, she cited research from the Economic and Social Research Institute that suggests there is typically an 8-10 month lag between increased energy prices and higher food prices.
“What is certain is that people are facing into a winter with much higher energy costs. While Ireland’s economy continues to demonstrate resilience, this will be of little comfort to people heating their home,” English said.
“This stems from continued conflict in the Gulf region, which is the driver of increased energy costs. This is the second time Ireland [and Europe] has been negatively impacted by energy prices stemming from a conflict in recent history, the first being the illegal invasion of Ukraine,” she said.
