Inflation Rears Its Hideous And Voracious Head In Ireland

[Realistbear]

http://www.rte.ie/business/2006/0323/cso.html

Energy pushes factory gate prices up

March 23, 2006 11:32

The latest figures from the Central Statistics Office today show that factory gate prices increased by

0.7% in February 2006

. The CSO says this compares to an increase of 0.1% the same time last year, and as a result, the annual percentage change showed an increase of 3.3% last month.

The CSO says that the price of

energy products increased by 12.7% in the year

since February 2005, with petroleum prices soaring by 30.1%. In February 2001, there was a monthly increase in energy products of 0.9%, and an increase in petroleum products of 3.3%.

All building and

construction material prices increased by 5.1%

in the 12 month period, while they rose by 1.3% in the month.

The figures also reveal that most significant changes in wholesale prices in the month were increases in basic chemicals, which rose by 1.1%. Meat and meat products increased by 1.6%, pharmaceuticals and other chemical products were up 0.9% and medical, precision and optical instruments, watches and clocks rose by 1.3%. There was also a decrease of 0.2% in dairy products.

These kinds of rises have a quick cure waiting in the wings--problem is that HPI cannot survive a rising interest rate environment. And without a rising IR enviroment inflation just keeps getting worse and worse. The Irish are now facing reality along with the UK.

[sign_of_the_times]

they should get Gordon O'Brown to do their CPI figures. Inflation, what inflation ?

[MarkG]

The Irish are now facing reality along with the UK.

The difference is that the Irish have absolutely zero control over interest rates, thanks to joining the Euro. Having idiots running the BoE may be bad, but at least we have some control over them as a nation.

[Michael]

Ireland without its own currency not only can't control interest rates but can't let its currency devalue as an escape valve to retain competitiveness when inflation takes hold.........

British £ v Deutsch Mark in the 1970s is a prime example.....£ fell from 8DM to 3DM over that decade....

[Columbo]

they should get Gordon O'Brown to do their CPI figures. Inflation, what inflation ?

As in now you see it, now you don't

[Realistbear]

The Italians are hamstrung by the Euro and ECB also. Makes you wonder how long it can hold together given the imbalances. IMHO the Japanese carry trade crisis will finish the Euro off.

[right_freds_dead]

it does point out though that new labour DONT CONTROL irelands economy.

so in a way can we really blame gordon brown for our hpi worries ??

its made me think.

[Guest consa]

Italy does also have problems

Italy’s real estate market is beginning to slow down after enjoying seven years of almost continuous growth, reports www.fly-2let.co.uk.

The ninth Lombardy real estate report of Centredil–Ance Lombardia found an ‘uneven performances in the residential and other sectors.’

The report estimates the current rate of house price inflation at between 4 per cent and 6 per cent. ‘Assuming a gradual recovery of the economy in the second half of 2006 and with virtually stable inflation, 2006 should witness sales slightly in excess of 116bn euro, an increase of 1.8 per cent on an annual basis’.

However, more pessimistically the report states ‘the Italian residential real estate market is well on its way towards “zero growth”, emulating countries like Great Britain, the Netherlands and Australia. Prices will grow by 2-3 per cent’.

http://www.themovechannel.com/News/2006/March/22e.asp

And the ECB aren't done with their rate tightening yet by any means