Headline inflation in the Irish economy remained near 3 per cent in February but this was before the shock to energy prices triggered by US-Israel-led war in Iran.

Consumer prices rose by 2.7 per cent over the 12 months to February, unchanged from the previous month, as rising food and housing costs offset falls in the cost of transport and household furnishings.

However, the latest Consumer Price Index (CPI), the State’s official measure of inflation, was compiled in the weeks leading up to the start of the US-Israel war in Iran, which has led to a spike in oil and gas prices.

The jump in oil prices has already hit motorists with the cost of a litre of motor fuel at €2 and above in many fuel forecourts, a level not seen since the summer of 2022 in the aftermath of Russia’s invasion of Ukraine.

An even steeper rise in gas prices, if prolonged, is expected to feed into higher energy bills for households later in the year.

Ireland is heavily reliant on imported natural gas to meet its energy requirements and is therefore vulnerable to price volatility on international markets.

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The original price hike from Russia’s attack on Ukraine is still playing out in the form of higher food prices.

The latest CPI indicated food prices rose at an annual rate of 3.4 per cent in the 12 months to February while restaurant prices, predicated on higher food costs, rose at an annual rate of 3.6 per cent last month.

Food and restaurants accounted for over 1 per cent of the headline 2.7 per cent rate of inflation.

“Food and non-alcoholic beverages rose due to higher prices across a range of products such as meat, confectionery and desserts, vegetables and cereals and cereal products,” the Central Statistics Office said.

The other category driving inflation was housing, water, electricity, gas and other fuels which increased primarily due to a rise in the cost of rents (2.6 per cent) and mortgage interest repayments (5.2 per cent).

“Today’s Consumer Price Index won’t reveal the impact the Gulf region conflict has had yet, as it covers the February period before this conflict first started,” said Kate English, chief economist at Deloitte Ireland.

“It does mean that next month’s publication for March will be one to watch,” she said.

“Today’s inflation figures are steady in Ireland, but next months could be an entirely different ball game. It all depends on how long this conflict lasts,” English said.

“Following Russia’s invasion of Ukraine in February 2022, Ireland’s inflation spiked, as we grappled with an energy crisis and supply chain disruptions. However, this rise in inflation was not solely down to the invasion of Ukraine, the Covid-19 pandemic was a significant factor too,” she said.

“What is different this time is we’re starting from a higher base for food inflation, which sat at 2 per cent in January 2022, in contrast to today’s 3.4 per cent,” she said.

“With fertiliser prices rising due to the supply issues created by the Gulf conflict and gas prices increasing production costs of fertiliser, there is a very real risk for food price inflation if this is to persist,” she added.