Irish Inflation Set to Surge to 4.5% Early Next Year—Here’s What Every Entrepreneur Needs to Know Now!
So, here we go again—just when you thought the economic rollercoaster was slowing down, Irish inflation decides to crank up the heat. Picture this: fuel prices climbing like a relentless mountaineer, pushing consumer costs higher and higher. Thomas Pugh, the sharp mind at RSM Ireland, warns us that September’s inflation isn’t just a blip—it’s marching towards 4.5% early next year. And no, it’s not just about jet fuel and diesel surging; it’s about a chain reaction hitting everything from your heating bills to the groceries on your table. Why does this matter? Because when energy prices take the lead, the whole economy feels the pinch—and trust me, this ride could last well into 2028. Buckle up—let’s dive into what’s really driving these numbers and what it could mean for your wallet. LEARN MORE
Irish inflation is expected to rise to 4.1% in September and could reach 4.5% early next year as fuel, energy and other costs continue to increase, according to RSM economist Thomas Pugh.
Pugh, chief economist at RSM Ireland and RSM UK, said the Consumer Price Index (CPI) is expected to increase from 3.7% to 4.1% in September, driven primarily by higher fuel prices.
“This will be driven by continued jumps in fuel prices, especially diesel, as higher oil prices and tight refining capacity continue to push up prices,” he said.
Diesel prices are now averaging €2.12 per litre, Pugh said, close to the €2.18 per litre peak recorded in April.
He said the main upward driver of inflation in September would be oil prices, with heating oil and motor fuel prices continuing to rise amid low refining capacity and renewed tensions in the Middle East.
Pugh also expects services inflation to rise from 4% to 4.4%, with airfares among the areas expected to see higher inflation.
He said airline prices were likely to fall by less than usual in September as carriers seek to protect margins from higher jet fuel costs.
“Further ahead, inflation is likely to keep edging up as utility bills reset higher in October and indirect energy effects add to airfares, manufactured goods and food inflation,” Pugh said.
He expects inflation to peak at around 4.5% in January and February, with food inflation forecast to rise from almost zero currently to around 3% by mid-2027.
Pugh said higher energy prices were increasingly likely to feed into food, manufactured goods and other energy-intensive services.
He also warned that inflation risks remained skewed to the upside, pointing to low natural gas storage across Europe.
“A cold Winter could see stocks depleted quickly at which point prices would surge as countries return to the spot market,” he said.
“In any case, the more persistent shock means that inflation will remain above target until early 2028.”
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