BY JOHN ELLIS, FINANCIAL ADVISOR
The latest inflation figures brought a small piece of good news. Prices rose by 3.4% in the year to June, easing from the higher rates we’d become used to. That’s welcome on paper, but I doubt many households feel much relief when they’re standing at the supermarket checkout or opening household bills.
The truth is that inflation may be slowing, but the cost of living remains high. Prices haven’t fallen; they’re simply rising more slowly. For households already juggling mortgage repayments or rising rents, school costs and the price of keeping a car on the road, that distinction doesn’t make life any easier. Most people don’t judge the economy by inflation charts. They judge it by what’s left in the bank account at the end of the week.
Economists at the ESRI and the Central Bank have pointed out that higher energy costs take time to feed through to food prices. Even though fuel costs had settled somewhat, the earlier rises in transport, fertiliser and production costs are still moving through the supply chain, never mind what’s to come. That means we’re unlikely to see any meaningful drop in grocery bills soon, and we could even face further pressure later this year.
Pay has increased in many sectors but for many workers those rises have barely kept pace with living costs. At the same time, unemployment edged up to 5% in June. While Ireland’s economy is still performing well by international standards, global uncertainty doesn’t stop at Ireland’s border. Shifts in the technology sector and slower growth elsewhere eventually reach us all.
We have a varied local economy. Farming, tourism, small businesses and the people who commute for work all feel these pressures differently. Farmers are still dealing with high input costs. Retailers are watching every euro of customer spending. Hospitality businesses know that even visitors are becoming more careful with their money.
Housing remains the issue that colours almost every economic discussion. Demand across Kilkenny remains strong, but supply isn’t keeping up. For many first-time buyers, house prices are still out of reach, while rents keep climbing and the number of available properties stays limited. The reduction in VAT on apartment construction is a positive step, but it won’t solve today’s shortages overnight.
The IMF’s recent advice is also worth listening to. Ireland’s public finances are in a relatively healthy position, but spending money simply because it’s there risks adding to inflation when the economy is already running near capacity. Investing in housing and infrastructure will do far more to strengthen the economy than broad giveaways that provide only short-term relief.
So, what does this mean in practical terms? It means concentrating on the things we can influence. Improving efficiency where possible, checking insurance and utility bills and trying to build even a modest saving plan can all help if food prices rise further later in the year. None of these steps are dramatic, but they all add up.
For Government and local representatives, the priorities are straightforward. We need more affordable homes delivered at a faster pace. We need practical support for farming and rural communities, and cost-of-living measures that are properly targeted at those under the greatest pressure.
Despite the challenges, there are still solid reasons for optimism. Kilkenny continues to attract investment, our tourism sector remains a real strength, local businesses have proven remarkably resilient and our sense of community is something many places would envy. Those qualities have carried us through challenging times before.
The economic headlines suggest things are moving in the right direction. But statistics only ever tell part of the story. For many families across the county, the weekly budget is still under real strain. The real test isn’t what appears in the next set of CSO statistics. It’s whether people around kitchen tables begin to feel the difference.
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