Consumers have a right to feel aggrieved, writes Paul Cullen, Consumer Affairs Correspondent
The latest inflation figures due out today from the Central Statistics Office will tell many consumers what they already feel in their pockets; that the cost of living is increasing faster than it has for years.
The Economic and Social Research Institute has already forecast that the rate of inflation for December will rise close to 5 per cent, the highest level for six years.
And, it says, further price increases in the new year will see the rate of inflation for this month touch the 6 per cent barrier.
You have to go back to the dark days of the 1980s for the last time inflation rates reached this kind of level.
While this in itself is hardly a cause for panic - after all unemployment rates are much lower than they were 20 years ago - consumers have a right to feel aggrieved at the general complacency evident in official circles about continuously rising prices.
It is true that the economy is performing well but what value is this if inflation is making people poorer?
If the average citizen is unable to prosper sufficiently in the halcyon days of the Celtic Tiger by putting away savings for a rainy day, how is he or she expected to cope when a downturn arrives?
It's true that the ESRI believes the current rates are a "spike" that will pass as the year goes on; its predictions are that inflation will drop to 4 per cent by mid-year and 3 per cent by its end.
Yet there is, as the saying goes, "many a slip twixt cup and lip" and such medium-term forecasts are inevitably subject to the vagaries of local and international economics; just look at the gyrations in the price of oil and gas over the past year.
For the moment, certainly, consumers can see that prices are rising significantly faster than average incomes.
The recently negotiated national wage agreement, for example, envisages wage increases of just 2 per cent over the next nine months and 2.5 per cent in the six months after that.
So while high earners and other workers not subject to the agreement might well be able to negotiate bigger pay increases in the current economic climate, the vast majority of low and average earners are seeing their spending power steadily eroded.
Since last September customers have been hit with a barrage of price hikes across a variety of sectors (see panel), and more are to come. While the international price of oil goes through the floor, Irish consumers are being forced to pay 24 per cent more for gas and over 12 per cent more for electricity. The explanation given by the utilities is that fuel supplies were purchased almost a year ago when prices were high, yet few expect a concomitant drop in prices later this year when cheaper oil becomes available for power generation and heating.
Falling oil prices have had little impact on the transport sector either, where bus, rail, tram and toll prices have all been increased. Imminent increases in bread prices are being blamed again on oil prices, as well as bad wheat harvests. Waste charges have risen significantly, while last month's budget also contributed to inflation, notably through a 50c increase in the price of cigarettes.
There's more to come, too. VHI charges, which went up by 12.5 per cent last September, will go up even more later in the year. An Post will charge 15 per cent more for sending a standard letter next March and Eircom wants to increase its line rental charges.
Then there are the increasing number of non-standard charges increasingly levied on consumers, such as Aer Lingus's new baggage charges or NTL's €2 charge for those not paying by direct debit and a €7.68 charge for late payment by cable television customers
The detail of today's inflation figures from the CSO will show that inflation is rising far faster in some sectors than others. Food prices, for example, are relatively stable, perhaps thanks to the abolition of the Groceries Order last year.
In contrast, the cost of services is rocketing, allegedly due to rising wages. Yet many of the areas where prices are rising most steeply share a single defining characteristic - a lack of real competition. Attempts to deregulate the electricity and gas markets, for example, have clearly failed, if the delivery of lower utility prices is to be the aim.
This is true of the private sector too; for example, Eircom's stranglehold over telephone line rental or NTR's control of the M50's Westlink. If inflation is to be reined in, competition - real, meaningful competition - will have to be introduced into the market.