From mortgages and rent to petrol, electricity and health insurance, prices are rising rapidly, writes Laura Slattery.

It is enough to make the average debt-ridden, retail-hungry consumer cry. Inflation is at its highest rate since April 2003 and is now running at an annual rate of 4.2 per cent. Interest rates have gone up for the fourth time in nine months. Gas and health insurance price rises are pencilled in for later this year, while electricity bills are set to increase in January.

Householders' cashflows will be squeezed further if the European Central Bank (ECB) sticks to the plot laid out in economists' predictions and increases interest rates by a further half percentage point by the end of 2006.

The next five months will "test the resolve" of Irish consumers, Davy economist Rossa White said this week.

Fast expiring oil reserves, global warming, the German economy and rip-off Ireland have all been blamed at some point for these new pressures on our pockets, but just how bad is it for the average consumer?

MORTGAGES AND RENT

Last week's quarter point increase in the ECB base rate, which lenders have already passed onto their tracker mortgage customers, adds €20-€50 to the monthly repayment on many mortgages.

Borrowers with a mortgage of €250,000 over 25 years on a typical ECB tracker rate have already seen their monthly repayments jump by €100 so far this year. The latest increase will add a further €34 to their repayments, taking them to €1,333 every month.

So such a borrower is already paying €134 more every month than they were this time last year.

Two further quarter point increases are expected before Christmas, most likely in October and December. If these kick in, repayments on a €250,000 loan over 25 years will rise by €71 a month to €1,404, based on a variable tracker rate of 4.1 per cent rising to 4.6 per cent.

The higher interest rates mean that repaying the mortgage will cost €202 more every month than it did last year.

First-time buyers and people who buy property in Dublin will have higher than average borrowings and suffer the brunt of the current interest rate rises.

The bad news for tenants who have yet to buy property or have hit an affordability brick wall is that residential rents have increased by an average of 6.9 per cent in the past year, according to the most recent figures from the Daft.ie rental index.

ELECTRICITY AND GAS

People who walk or cycle to work and like to sit in the dark seem set to have a very good 2007, IIB Bank's chief economist Austin Hughes notes. But for typical energy-guzzling, oil-addicted, resource-depleting consumers, the cost of heat, light and travel is only going one way.

Electricity prices are set to rise by 10-20 per cent from January 2007, with households likely to face the lower figure of around 10 per cent and corporate customers facing a 20 per cent rise.

To add to householders' woe, Bord Gáis announced last month that the price of gas is to increase by 34 per cent on October 1st.

Both increases are related to international fuel prices and Ireland's high dependence on imported fossil fuels.

According to the head of energy supply at Bord Gáis, David Bunworth, there are two things that influence gas prices. One of them is the cost of crude oil, which this week surged to almost $77 (€59.9) a barrel after the British energy giant BP began to shut down production in the largest oilfield in the US, in Prudhoe Bay, Alaska. With global oil reserves drying up, the cost of crude oil is likely to remain high.

The other factor influencing the price of gas is the infrastructure needed to extract the supply of natural gas from the earth. It is expected that new gas infrastructure coming on stream in the UK market next year will stabilise wholesale gas prices. But no one can predict for sure, says Bunworth.

It is estimated that the gas from the controversial Corrib field off the Mayo coast could eventually supply around 60 per cent of the gas that Irish households and businesses need for 10 years, reducing Ireland's dependence on international energy supplies.

But that won't help Bord Gáis customers this winter, with average annual bills set to rise from €902 to €1,208.

The average domestic electricity bill of €740 will climb to €814 in the event of a 10 per cent rise, or €888 if a 20 per cent increase applies. On average, a householder can expect to pay over €30 more a month to heat and power their homes.

PETROL

How much petrol motorists pump into their cars every month will naturally depend on the length of their journeys and the type of car they own. Someone who takes public transport to work and only gives the modestly sized engine in their car a whirl on their weekly supermarket trip won't be too bothered by rising petrol prices.

On the other hand, people who drive into Dublin city centre from the farthest reaches of the commuter belt every morning and night will see the benefit of lower mortgage repayments reduced by higher petrol costs.

According to figures released earlier this week by Sustainable Energy Ireland (SEI), the average annual mileage of all cars in 2005 was 16,894 kilometres (10,498 miles). The biggest selling car in Ireland is the Ford Focus, a 1.4 litre engine car with a fuel consumption rate of 6.6 litres per every 100 kilometres travelled. So based on the average monthly distance travelled - just over 1,400 km - a typical Ford Focus motorist will need 92.4 litres of petrol a month. With the average price of unleaded petrol on garage forecourts standing at €1.17 per litre, according to a July survey by AA Ireland, this typical driver will end up spending around €108 a month on petrol.

In July 2005, when petrol prices were standing at an average of €1.05 per litre, this driver would have spent €11 less every month on petrol. And if predictions that petrol prices tip the €1.30 per litre mark over the next couple of weeks come true, the driver's average monthly spend will increase to €120 a month, €23 more than this time last summer.

FOOD AND DRINK

The Groceries Order, which legally prevented retailers from passing on wholesale discounts to consumers, was abolished earlier this year, on the recommendation of the National Consumer Agency.

But whether retailers decide to pass on discounts to consumers and result in lower food prices remains to be seen. Published yesterday, the July edition of the Consumer Price Index, the definitive measure of price trends recorded by the Central Statistics Office (CSO), shows that the price of food and non-alcoholic beverages increased by 1.5 per cent over the previous 12 months.

The rise in food prices during 2006 has been "particularly sharp", Bloxham Stockbrokers' economist Alan McQuaid commented yesterday.

The increase suggests that the abolition of the Groceries Order has not had the desired effect, according to Kathleen Lynch, the Labour Party spokeswoman on consumer affairs.

"Any slight fall in prices for goods previously covered by the order has been totally negated by increases in other areas," she says.

While the cost of tea, frozen vegetables, soft drinks, biscuits, poultry, pork, fresh fruit and cereals went down in July, there were significant increases in the cost of beef and fresh fish, with coffee, potatoes and frozen, tinned and smoked fish also costing more.

What is really pushing up the price of the average shopping basket, according to Minister for Agriculture and Food Mary Coughlan, is that we are purchasing more and more pre-prepared convenience foods, rather than buying meal ingredients separately and attempting a little culinary magic ourselves.

Meanwhile, the environmental ransacking of the planet may result in higher food prices as well as inflated energy bills. According to White, if Europe's hot and dry weather this summer takes its toll on crop yields, it could push up food prices this winter.

THE NEXT BUDGET AND BEYOND

A generous budget in December might ease any financial pain suffered over the next few months and help with January's spending hangover - as long as Minister for Finance Brian Cowen doesn't heed the advice of the International Monetary Fund (IMF) and opt for prudence in light of Ireland's economic vulnerability to "external shocks".

For many well-off Irish people, price increases are now a fact of life, and they will either be able to shrug them off or simply have to make minor adjustments to the lifestyles to which they have become accustomed.

But Hughes estimates that some 50,000 vulnerable borrowers will have to seriously tighten their belts and up to 80,000 will have to "look at their sums" in order to make ends meet and keep their mortgage repayments on track.

More than 1.1 million Irish adults signed up to the Special Savings Incentive Account (SSIA) scheme and should be able to use their funds to absorb any extra drains on their resources.

But two-thirds of SSIA holders don't get their hands on their cash until next year and around 50 per cent of them will have to wait until April 2007 before an average of €15,000 is finally theirs.

Meanwhile, Towards 2016, the new national pay deal that promises a 10 per cent pay rise over 27 months, is still in the process of being ratified.

But with utility providers, lenders and other vultures queuing up to take bigger swipes out of consumers' bank balances, the gloss may well be taken off any extra pay or SSIA sums by the time they are lodged in current accounts.