Inflation to hit 2.5% by July - BOI
Bank of Ireland's May bulletin has predicted that inflation could top 2.5% by July as the effect of oil price rises take hold.
March saw Ireland's "low" inflation rate for the year at 1.4% the bank believes, and says that prices could begin to creep upwards over the remainder of the year.
It states that the European Central Bank is unlikely to cut interest rates further in the short term, but more importantly oil prices rises are gaining momentum.
Crude oil has gone up to the tune of $10 per barrel in the last month or so and is beginning to feed through into higher prices "at the pump".
Once this happens, the higher energy prices will be reflected in the Consumer Price Index figures from May and on into the summer months.
Already, an increase in electricity costs and higher prices for petrol and home heating oil contributed to a rise in energy costs of over 2% in the April inflation rate, which accounted for more than 33% of the increase in the CPI in April.
Last year, energy prices fell in the summer months after US President George Bush declared hostilities in Iraq 'at and end.'
Other factors that contributed to the increase in the Irish CPI on the month were an increase in childcare costs and higher prices for eating out.
Food prices continued to fall in April but BOI warned that this trend is unlikely to continue also.
