Foot-and-mouth disease was one factor no domestic commentator had even thought of when making predictions for the likely fall in inflation this year.

Most still expect inflation on average to be lower this year than last, but now the difference is likely to be less marked. Prices of lamb and mutton and, to a lesser extent, pork and beef have all risen significantly.

Part of this is down to domestic shortages as a result of foot-and-mouth restrictions, made worse by exports to the UK to compensate for shortages there. Even if the consumption of meat had fallen on the back of foot-and-mouth, this would not be reflected in the figures. The CSO uses set weightings for all parts of the consumer price index, based on survey data which are only occasionally updated.

According to Mr Jim O'Leary of Davy Stockbrokers, foot-and-mouth-related price rises accounted for around 0.2 percentage points of March's 5.4 per cent inflation rate.

But it was not only rising food prices which faced Irish consumers. Drink and cigarette prices rose by 0.7 and 1.4 per cent respectively in March alone. Insurance premiums increased significantly on property and vehicles, while mortgages and rents also rose.

It is not clear that this will be the peak in inflation this year, although a return to the rates of 7 per cent seen last November is unlikely.

According to Mr Oliver Mangan of AIB, inflation may edge down in April but the core and key European rates will remain the same. He forecasts that inflation will fall to 3 per cent by the end of the year and may dip below that if the European Central Bank cuts interest rates. He says it will average around 4.25 per cent this year.

The factors which pushed inflation so high in 2000 have mostly abated. If anything, mortgage rates should drop this year and oil prices are likely to fall. In addition the Minister for Finance refrained from any massive increase in excise duties in the last Budget, unlike the previous one.