You might be forgiven for thinking that the inflation crunch is all but over.
The most recent consumer price data from the Central Statistics Office tells us that prices have risen by 1.7% in the year to May – which is roughly where it’s expected to be. The European Central Bank certainly seems to think it’s gotten a handle on inflation – which is why it’s more than halved interest rates in the past year.
But of course the relatively modest increases in prices we’re seeing now are increases nonetheless – and they are on top of the price rises that would have been recorded in 2024, and 2023, and 2022.
Because we’ve been dealing with above-average inflation for many years now, and that has a cumulative effect on the cost of every day items. Really, if you want to know much prices have changed in a relatively short period of time, looking at last year’s prices won’t give you the full picture.
Really, you need to compare the data over the past few years.
Some would point to the start of Russia’s full scale invasion of Ukraine in February 2022 as the point at which inflation really began to pick up pace – but while that did have a massive impact, it also wasn’t the starting point of the pricing problem.
Because inflation had already gathered momentum before that event – consumer prices rose by 5.6% in the year to February 2022. A big reason for that was down to the cost of goods and services, which rose sharply as economies emerged from covid lockdowns and global supply chains struggled to catch up.
Within that too was energy – the price of which had fallen during the height of the pandemic – due to a lack of demand – but then bounced back sharply as economics got back towards a normal footing.
(Looking at the February 2022 data again – electricity prices were 22.4% higher year-on-year in that month; gas prices were 28% higher.
Then things got even worse in the wake of Russia’s attack on Ukraine.
So with all that in mind, to truly see how much prices have changed, it’s best to go even further back. Really, May 2021 marks the point just before the high period of inflation kicked in.
Prices had risen by 1.7% in the year to that month – the same as the rate of inflation we’re seeing today – but began to rise rapidly after that point.
So May 2021 to 2025 – how much have prices risen by during that time?
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Across the board, we’ve seen price inflation of 20% over that four year period, according to the CSO data.
Within that, food prices are up more than 25% over the same period.
That headline figure covers everything – from groceries, to energy, to insurance costs, to mortgages. Even within the ‘food’ category, there’s a huge amount of variety from product to product. That means, depending on what you’re putting in your trolley – or what weekly expenses you have – the impact of inflation may be very different for you than for someone else.
For example, if you buy a lot of meat – you’ll have been hit harder by inflation over the past four years.
Beef and veal prices are up nearly 43% in the four years – lamb and goat prices are 33% higher. Poultry prices are up 24%.
It’s similar for connected products – like eggs and dairy.
Butter prices are up more than 46% in the past four years; while whole milk prices the same. Eggs are 29% dearer than they were in the middle of 2021.
But even if you’re avoiding all of those products – perhaps you’re on a vegan diet – you’re probably not avoiding some of the well-above-average inflation hits.
For example, olive oil prices are 48% higher over the four years – oils and fats in generally are up nearly 40%.
Meanwhile margarine and other vegetable fats are 33% dearer than they were in May 2021.
What about some of the treats people might like to add to their weekly shop?
It’s a similar story.
The price of chocolate is 41% higher over the period – which is quite a jump for what is essentially a luxury item.
Part of that can be blamed on the sharp rise in the price of dairy – that would have been seen at a wholesale level as well as a consumer level. The price of sugar is also much higher now than it was four years ago.
For a consumer, sugar is now nearly 60% dearer than it was in May 2021. So if two of the key ingredients are far more expensive, the end product is going to rise in price too.
And that will also feed into the 28% increase in the price of confectionary products – while other bakery products are up by almost the same amount over the four years.
Crisps are 26% higher – so again, a good bit above the average increase in consumer prices.
Meanwhile another thing that some people would consider a treat – alcoholic drinks – are 20.5% higher, based on off licence prices.
Interestingly, though, within that beer prices are 25% higher while wine prices are only up 5.5% over the four years, which is actually a very modest increase.
People may have spotted chocolate prices rising – but not by 41%…
Yes – because it’s probably one of the areas that has been most vulnerable to tactics like shrinkflation, which is a sneaky way of raising prices without appearing to raise prices.
This is where the price of your bar – or packet of biscuits, or cakes – stays the same as before, but what’s inside the packet is reduced. That means you’re paying more per gram than you were before.
This has been particularly prevalent in multipacks – maybe because it’s a bit harder to see what you’re getting until you take it home. But when you do you’ll probably find the bars inside are closer to the old ‘fun sized’ versions than the full-sized type that are sold individually in newsagents.
It’s also more obvious at annual events like Easter and Christmas – with eggs and selection boxes getting smaller and smaller with each passing year.
And that’s not to mention ‘skimpflation’ – where the ingredients are swapped for cheaper, lower quality alternatives. That kind of thing wouldn’t really be reflected in the CSO data, but it probably is easy to spot on a taste-test.
Are there other grocery items that haven’t risen by much since May 2021?
There are a few actually – jams, marmalades and honey prices are only 6.3% higher.
Dried fruit and nut prices are up 11.8% – ice cream is 12.6% more expensive.
Which, in the context of some of the changes we’ve seen in the past few years, is quite a small shift.
And interestingly, fresh or chilled seafood prices are actually lower over the four years – by close to 1%.
Outside of the grocery aisle, what’s impacting the rate of inflation?
We do tend to think of consumer prices as groceries – but really it’s anything that consumers might spend money on.
So that includes mortgage interest – the cost of which has risen by more than 77% in the past four years. No huge shock, perhaps, given that ECB rates were at zero back in May 2021, and then they rose rapidly from mid-2022 onwards.
But again this shows how the averages won’t reflect the experience of the individual.
A tracker mortgage customer would have felt the full effect those ECB rate rises – but someone who was lucky enough to get a decent fixed rate in early 2022 would likely have been largely insulated from them.
And, of course, if you don’t have a mortgage, you wouldn’t have felt it at all. But maybe you did feel the 32% increase in private rents over the same period.
What about energy costs?
Yeah, this is really the big one – the category that has seen by far the biggest increases over the past four years.Natural gas prices are up 95% since May 2021 – electricity prices are up 52%. Liquid fuels are nearly 37% higher.
Now there is a caveat to add to this – and that’s that energy prices were still somewhat supressed in May 2021, following the collapse in demand on the back of covid lockdowns. So we are comparing a relative low to what we’re feeling now. But that doesn’t change the fact that people are now paying in some cases double what they were paying to heat their home just four years ago.
And it’s important because the shift in energy prices underlies everything else that we see in terms of consumer prices.
Because if it costs more to power machinery in factories, to fuel farm vehicles and trucks, to light and heat warehouses and shops – that all pushes up the cost of production on grocery items, which pushes up the price paid by consumers.
So while it’s not the only factor, higher energy prices are very much at the centre of why everything else has gotten more expensive in the past four years.
What other factors are there?
One of the other big factors has been climate change – because unseasonable weather has been having a significant impact on crop yields on a number of different products in many different countries.
That could be wetter than normal winters or springs, which delays or damages the planting of new crops – or it could be hotter springs and summers, which leads to drought and impacts harvests.
In some cases it’s both in the space of one year.
We saw that in recent years in Canada, which is a major producer of durum wheat, which is used in pasta. And that contributed to the 29% increase in pasta and couscous prices in the past four years.
But that is only part of the story – because when it comes to crop production and supply and demand, there are so many factors at play.
For example, last year Canadian farmers last year planted less wheat and more canola – or what we’d know as rapeseed – because they reckoned they could get better prices per acre for the latter. That’s in large part because rapeseed can be used in biofuel and sustainable aviation fuel.
But their wheat planting has bounced back this year, because farmers are preparing for the impact of Chinese tariffs, and the broader impact of Donald Trump’s trade wars.
Climate change is also claimed as part of the reason for the rise in dairy and meat prices here – indirectly at least – because farmers say all of the costs involved in complying with environmental regulation is adding to their cost.
Connected to that, farmers here have also been encouraged to reduce the size of their herd – which has been happening steadily in recent years. And if you have fewer dairy and suckler cows, and fewer sheep and lambs, then supply is constrained, and the price almost certainly goes up.
How have people’s wages changed compared to prices?
Interestingly, when you look at separate CSO data, it looks as though wages have largely kept up with inflation.
Comparing the first quarter of 2021 with the first quarter for this year – the most recent data available at the moment – you can see that average weekly earnings rose by 19.3% over the four year period.
That’s a little behind the 20% rise in overall prices that were seen between May 2021 and 2025 – meaning, on paper at least, real prices are only slightly higher than they were four years ago.
But again, we have to give the warning that these are national averages across a wide range of industries – so one person’s experience will be very different to another’s.
For example, if you’re working in information and communications, your average weekly earnings are up 29% in the four year period – so well above the rate of inflation.
Professional, scientific and technical activities have seen wages rise by 24%.
But people in education have seen their incomes rise by 12.4% – well below the average rise in prices.
Those in the arts, entertainment and recreation are up just over 9%, so their wages have fallen way behind prices.
And even within these sectoral figures, there’s likely to be a lot of variation from company to company and role to role.
But either way it is clear that, while some have been able to earn their way out of inflation, others have seen a very real increase in their cost of living in the past four years.
