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What is inflation and why is it rising?

It's considered cheap and cheerful - and the most popular dish for Irish children according to research - but the price of pasta is steadily going up.

Last year, a kilo bag of pasta cost about €1.50. This year, that same bag costs €1.60.

And it's not just pasta. Most things in the shopping trolley are getting more and more expensive.

It's all because of something called inflation, and at the moment, inflation is at its highest rate in 20 years.

What is inflation?

Inflation comes from the word inflate, which means something is growing or getting bigger.

In terms of money, inflation means that the price of goods and services is growing or rising over time.

The rate of inflation is based on the consumer price index, which measures the change in the price of thousands of goods and services every month.

The biggest increases by far have been in the cost of fuel for driving and for heating homes.

The price of petrol, for instance, has gone up by 32%, and diesel rose by 36%.

That means everyday trips like the school run are costing much more.

The cost of staying warm at home has also shot up with home heating oil now 50% dearer than last year.

That’s a lot of money.

Why are inflation rates rising?

The pandemic is one of the main reasons.

Since it began, people all over the world have been spending a lot less money, because they were forced to stay home.

Fuel prices had dropped because people didn't drive much anymore.

Now that everything is moving towards normality, so is the economy.

People want to spend money again so the demand for goods and services is rising quickly.

When everyone wants the same thing, the price usually goes up.

Fuel prices have also been pushed up because of uncertainty about future supplies being disrupted, because of political tensions between Ukraine and Russia, which is one of the biggest suppliers.

In Ireland, the annual average price increase was 5.5% in the last year. That is called the rate of inflation.

Is inflation only happening in Ireland?

Ireland is not the only country going through this. Lots of countries are experiencing the same thing as inflation is happening all over the world.

In the UK, the cost of living rose by 5.1% and by 6.2% in the US. Across the eurozone there has been an average increase of 4.1%.

Last night, the Government here announced plans to help people cope with the rising rates of inflation.

Some workers are looking for wage increases so they can keep buying what they need every week.

But economists warn that if you put too much extra money into the economy with wage increases and Government subsidies, prices will just go up even more.

Getting the balance right is difficult - a bit like cooking the perfect bowl of pasta.