{"id":361410,"date":"2026-03-23T20:26:22","date_gmt":"2026-03-23T20:26:22","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/361410\/"},"modified":"2026-03-23T20:26:22","modified_gmt":"2026-03-23T20:26:22","slug":"inflation-likely-to-rise-to-4-out-to-april-on-foot-of-iran-crisis-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/361410\/","title":{"rendered":"Inflation likely to rise to 4% out to April on foot of Iran crisis \u2013 The Irish Times"},"content":{"rendered":"

Inflation<\/a> is likely to rise from 2.7 per cent in February towards 3.5-4 per cent through March and April on foot of US president Donald Trump\u2019s ultimatum to Iran <\/a>that he would strike the country\u2019s energy infrastructure, Bank of Ireland has warned.<\/p>\n

Equity markets saw a fresh sell-off on Monday morning as investors reacted to the threat, which Trump <\/a>had said the US would carry out should traffic through the Strait of Hormuz fail to resume. <\/p>\n

Trump has since \u201cpostponed\u201d the strikes for a five day period following what he called \u201cproductive conversations\u201d about a \u201ccomplete and total resolution\u201d to the conflict in the Middle East. Oil prices plummeted, but the situation remains fluid.<\/p>\n

Speaking before Trump\u2019s postponement, Bank of Ireland<\/a> chief economist Conall Mac Coille said Brent crude oil prices were likely to fall from $113 (\u20ac97.50) per barrel presently to $89 per barrel by the end of 2026.<\/p>\n

However, he said the impact of higher petrol, diesel and home heating oil prices are still likely to push up consumer prices.<\/p>\n

A tax rebate scheme for hauliers, a double fuel allowance payment and a reduction in excise duty to cut fuel prices at the pumps are all expected to be agreed by the Government on Monday, but the measures will initially be in place for only a number of weeks.<\/p>\n

[\u00a0Government keen to avoid energy supports pushing up inflation, Miche\u00e1l Martin saysOpens in new window<\/a>\u00a0]<\/p>\n

Mac Coille said the move to cut excise duties \u201cmay dilute some of the upward impact\u201d on inflation next month, while Ireland\u2019s household savings rate of 12 per cent in in the last quarter of 2025 indicates many households will have room to sustain \u201creal spending\u201d.<\/p>\n

\u201cThat said, the clear risk to our forecast for Irish consumer spending to grow by 2.3 per cent in real terms in 2026 now lies to the downside, given the pressure on real incomes,\u201d he said.<\/p>\n

Irish petrol and diesel prices have now both increased to, or above, \u20ac2 per litre. Furthermore, home heating oil prices have increased from \u20ac490 for 500 litres, to \u20ac880 currently. <\/p>\n

\u201cWe estimate this is likely to lift Irish consumer price index (CPI) inflation by more than 1 percentage point, from 2.7 per cent in February, to 3.5-4 per cent range through March and April,\u201d Mac Coille said.<\/p>\n

\"\"The difficult choices that could dramatically increase housing supply in Dublin<\/p>\n

\u201cThis is before any offsetting government measures on excise duties may be implemented. Any action here may effect April\u2019s CPI inflation figure, but not March\u2019s, as the data are collected in the second week of the month.<\/p>\n

\u201cOf course, in time both household energy bills, foods and other prices affected by energy costs and supply-chain disruption may rise too \u2013 depending on how events in the Middle East may unfold.\u201d<\/p>\n

Bank of Ireland had forecast Irish consumer spending would grow by 2.3 per cent in real terms in 2026. \u201cClearly, the risk to this projection is to the downside as real incomes may be eroded by higher CPI inflation,\u201d Mac Coille said. <\/p>\n

\u201cThat said, potential cuts to Ireland\u2019s elevated household savings rate and Government policy actions may mitigate the impact.<\/p>\n

[\u00a0Irish inflation at 2.7% ahead of expected price surge from Iran conflictOpens in new window<\/a>\u00a0]<\/p>\n

\u201cNotably, Irish consumer spending expanded by 5 per cent in 2023 and 2.9 per cent in 2024, despite CPI inflation of 6.3 per cent and 2.1 per cent respectively, albeit sustained by pent-up demand coming out of the Covid-19 pandemic.\u201d<\/p>\n

Mac Coille said events of the past couple of days are likely to lead to three rate hikes from both the Bank of England and the European Central Bank (ECB) by the end of the year, most likely starting on April 30th.<\/p>\n

\u201cOptions are now fully pricing in an ECB rate hike on April 30th and the deposit rate to rise to 2.75 per cent by end-2026, with a 45 per cent probability of a further increase to 3 per cent,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Inflation is likely to rise from 2.7 per cent in February towards 3.5-4 per cent through March and…\n","protected":false},"author":2,"featured_media":361411,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[7863,72,943,969,113,61,60,6000],"class_list":["post-361410","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-bank-of-ireland","tag-business","tag-cost-of-living","tag-donald-trump","tag-economy","tag-ie","tag-ireland","tag-oil"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/361410","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=361410"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/361410\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/361411"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=361410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=361410"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=361410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}