Fears Inflation Will Peak To Over 10%

Bank warns of big squeeze on households in coming months

- Owen Conlon

HOUSEHOLD budgets will be squeezed with inflation peaking at over 10% in the coming months, the Central Bank has warned.

In its latest Quarterly Bulletin, the bank said yesterday that household incomes will decline this year but are expected to recover next year with strong wage growth.

The bank predicted inflation to average out at 7.8% this year before falling to an average of 4.2% next year.

Meanwhile, disposable incomes are likely to fall by just over 3% on average, for the first time in a decade.