Lack of competition, international energy prices and interest rate hikes are driving up Ireland's inflation, not the Government, the Dáil heard today.
Labour leader Pat Rabbitte
The Taoiseach came under pressure from Labour leader Pat Rabbitte to explain rising consumer costs despite the abolition of the Groceries Order in 2006.
Mr Rabbitte pointed to a survey by Ibec which pointed to increases of as much as 20 per cent in the cost of bread, breakfast cereals and fruit juices in coming months.
He added: "Gas up 23 per cent; ESB up 12 per cent, bus and rail fares up, toll charges up, bin charges up."
The European Central Bank has promised another hike in interest rates next month, he added.
He asked the Taoiseach if he was concerned that the Towards 2016 national pay deal only offers a 10 per cent wage increase over 27 months.
He asked: "Can you explain why you told us, after the striking down of the Groceries Order, that food prices were going to fall?"
"I should have known when I heard Minister Micheal Martin say that prices in a shopping basket over a year would fall between €500 and €1,000 — I should have known that the opposite should have been the case.
"He's one of these ministers — so long as his tie is straight and the script is available from the spin doctor — out he goes. Anything at all comes off the top of the head."
Mr Rabbitte claimed that inflation could rise as high as 6 per cent for February.
The Taoiseach accepted there has been an upward inflationary trend for the past few months and it could continue for another month.
He added that inflation for 2006 was just over 4.1 per cent but that energy prices and interest rate increases made up as much as 2 per cent of that level. "This is very favourable in international terms," he said.
Lack of competition in some areas had also led to rising prices, he noted.
He said that cost of fresh meat, fish, vegetables, clothing and car insurance had declined in the past year and that grocery prices in the average shopping basket had remained low.
PA