Platform: Breakfast Roll Man might have voted for the status quo, yet the status quo has changed and not just with the composition of the new government. The booming Irish economy was built on the back of cheap credit but it is becoming ever more expensive to borrow money, while the debt we already have is now significantly more expensive to service.

Just as the period of extremely low interest rates reflected sluggish European economies rather than the booming Celtic Tiger, this era of increasing rates is due to the overall strength of the euro zone as a whole.

The last interest rate hike by the European Central Bank (ECB), which has left its benchmark rate at 4 per cent, was its eighth since December 2005 and is part of a process aimed at curbing inflation within Europe.

From being a global underperformer, Europe is now doing much better, with growth levels of about 2.5 per cent.

And, although most people are confident that we are moving towards the end of a higher interest rate cycle, Jean-Claude Trichet, the president of the ECB, has hinted that another rise is likely, with September being the analysts' choice.

Trichet conceded that the policy of increased rates is having effect since private sector credit has fallen from 9 per cent to 7.6 per cent and mortgage growth has also decreased from levels of about 12 per cent last year to 8.6 per cent now.

Both Breakfast Roll Man and the incoming government will hope that the credit slowdown will be enough to stave off too many more rate increases. Higher interest rates are a headache for policymakers here and not just because the government of the day doesn't want to spend its time in office saying that times are getting tougher.

With mortgage rates as a component of the consumer price index, every hike in rates adds to inflation.

At the moment it's running at a fairly horrific 5 per cent (albeit slightly down from last month's 5.1 per cent).

That's without the impact of the European Central Bank's latest hike. And so we're likely to see inflation rise again to take account of that and still further if the ECB pulls the trigger on another quarter point hike in September. That would have the effect of pushing headline inflation up to about 6 per cent, it's highest level in seven years.

The incoming government might draw some comfort from the fact that excluding mortgage interest, the level of inflation is running at just over 2.5 per cent - which is where it was 18 months ago.

But it's cold comfort because the fact is that while goods and services may not be rapidly increasing in price, the disposable income of those who have taken out mortgages over the same period has been rapidly decreasing.

So the net effect is broadly similar. For example, a fridge freezer might cost more or less the same as it did last year, but the person looking to buy it has less to spend, thus making the purchase a bigger proportion of their net income.

That means they might decide the old one will do perfectly well - which would be a dagger through the heart of the retail sector and, indeed, a government that wants economic growth to continue apace.

Investors should be happier with higher interest rates but most investors don't have their money lying in bank accounts anymore.

However, with bricks and mortar being the preferred option for Irish people with money, house price declines are only adding to the misery, while on global markets higher interest rates in Europe, the UK and the US have seen equity markets tumble again and bond yields go sharply higher.

Last week saw the benchmark 10-year bond in the US rise in yield by a whopping 21 basis points in two days, leaving it at an 11-month high of 5.17 per cent, while the equivalent 10-year bond in Germany broke through the 4.5 per cent barrier to end up at 4.58 per cent.

As the price of bonds falls when yields rise, the last week or so has been an uncomfortable one for investors - what with falling bond prices, falling equity markets, falling house prices and rising inflation - a combination that can leave even the most sanguine feeling somewhat battered and bruised.

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