Inflation has soared to above 8% as experts warn huge hikes in prices are spreading across the economy - from food to phone charges.
Prices have risen sharply across Europe over the past year due to supply chain problems after the pandemic, and then Russia's war in Ukraine, which sent fuel costs soaring.
The figures suggest a new era of fast price growth is now sweeping away a decade of ultra-low inflation that even turned negative during the pandemic lockdown.
The latest inflation figure of 8.2% in Ireland is just above the 8.1% average across the Eurozone. Worryingly, instead of easing, inflation is worsening, as it is up from 7.3% in April. Estonia had the highest estimated rate of annual inflation in May 2022 at 20.1%, while Malta had the lowest at 5.6%.
Energy prices are fuelling the inflation rise; they are estimated to be up 46.2% since May last year. Daragh Cassidy, of the utility switching site bonkers.ie, said: "Energy prices continue to be the main driver of inflation both in Ireland and in Europe.
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"And as Europe tries to wean itself off Russian gas and oil, it looks like higher energy prices are here for the foreseeable future.
"However, inflation is also beginning to shoot up in many other sectors of the economy, in particular food, where prices are now increasing by around 5% in Ireland and are likely to go even higher over the coming months."
He added: "Costs for communications and streaming services are also shooting up, with Vodafone, Three, Virgin Media and Netflix all announcing big price rises since the start of the year.
"Going forward, we can also expect to see a hike in interest rates from the ECB [European Central Bank] before the end of the year, which will increase mortgage repayments for those on variable rates or trackers."
David Berry, head of Kantar Worldpanel Ireland, which monitors supermarket prices, said: "Food and drink prices are continuing to climb and the impact of this on grocery budgets is now unavoidable for many people."
Cost of living is now a key concern for 81% of Irish consumers, the Kantar research found.
Mr Berry added: "A staggering 62% expect that they will have to cut back on the amount of food they buy in response to current prices. We'll be seeing the effects of inflation for months to come."
Consumers' Association of Ireland chief Dermott Jewell said: "The worry is that it is continuing to rise, it shows the difficulty trying to manage and monitor this.
"We now have the Taoiseach [Micheál Martin] making the point that consumers need to understand and batten down the hatches with significant increases in energy prices because of the decision taken at EU level with regard to Ukraine."
The EU has agreed to an embargo on most Russian oil imports after talks at a summit in Brussels, and this has sent oil prices up to $120 a barrel, the highest level since March, which will soon send prices at forecourts above €2 a litre again. European Council president Charles Michel hailed the deal as a "remarkable achievement", after announcing the sanctions will immediately impact 75% of Russian oil imports, "cutting a huge source of financing for its war machine".
Kevin McPartlan, chief of Fuels for Ireland, which represents the main oil suppliers, said yesterday: "As it is necessary for distribution and delivery of pretty much every other product, increases in the price of diesel, in particular, have a considerable inflationary effect.
"The Taoiseach recognised and pledged that Government 'will do everything we can to alleviate the pressures on consumers', so it is interesting to note that Government is still levying about 85c in duty, levies and VAT on every litre of diesel sold."
