General Industry News

Inflation hits 7% in April as Ireland’s cost of living soars

The Irish Times – 12.05.2022

Irish households have been warned to brace themselves for the sharpest cost of living squeeze since the early 1980s after another significant jump in the official inflation rate. The latest figures from the Central Statistics Office (CSO) show the annual rate of price growth in the Irish economy rose to 7 per cent in April thanks – in the main – to higher energy, fuel and grocery prices. The last time inflation was higher was November 2000, but experts are warning that the peak of the current price surge has yet to come and that inflation may hit close to 9 per cent in the coming months. The CSO’s latest Consumer Price Index (CPI) detected a broad-based price rise across the Irish economy in April. The main drivers were energy and fuel. Electricity, gas and other fuels were up over 45 per cent year-on-year. Within this category, electricity prices were up 28 per cent, while gas prices rose by over 50 per cent. Home heating oil has soared by 90 per cent in just 12 months. The cost of motoring has also risen sharply, with petrol and diesel prices up 24 per cent and 40 per cent respectively. Airfares are up on average by 93 per cent since April last year.

Special 9% VAT rate for hospitality set to be extended

The Irish Times –09.05.2022

The Government is set to extend the special nine per cent VAT rate for the hospitality sector beyond its current expiry date later this year. The extension is anticipated to cost between €200 million and €250 million. The measure, which was introduced in 2020 during the Covid pandemic following intensive lobbying from the restaurant, hospitality and tourism industries, was due to expire at the end of August, having already been extended in last year’s budget. A cut to the VAT rate was initially resisted by the current coalition during its first intervention in the Covid-era economy, the so-called “July Jobs” stimulus package in the summer of 2020. But the Government introduced the measure in Budget 2021, before extending it again last year. However, with a wave of insolvencies now feared in the wake of Covid-19 and the staggered withdrawal of pandemic-era supports, the Government and the Department of Finance is now open to extending it