Anyone who goes shopping on a regular basis has realised that the items he or she used to buy until last year have gone up in price.

It’s not a few cents here and there. The increase has arrived across the board, on almost all products and services.

And it did not (only) happen because of the Russian invasion of Ukraine. That did lead to a rise in prices, but the phenomenon had happened long before that.

Inflation should have been a hot topic in the election campaign, and the Nationalist Party should have made it one of its battle cries. The Labour Party, conveniently, did not bring up the subject, as it risked losing votes. What the Labour government did was hand out two cheques to each individual during the campaign, one in the form of a tax rebate, and the other in the form of a gift to make up for the cost of living.

In a way, the PL was admitting that inflation was having its effects, but it camouflaged it with an exercise that helped the government to endear itself more with the electorate.

But now the election is over, the cheques have stopped being distributed, and all households have to face mounting costs. Some are feeling the effect more than others; the families in the low income bracket are experiencing a mini-crisis. For them, if the cost of shopping for the bare necessities used to cost €100, and now it is costing €100 plus, plus, plus, it makes a big difference.

Pensioners, whose income is limited, are forced to make choices when they go shopping, because they cannot afford everything now.

Even families with higher income are feeling the pinch. The possibility is that rising costs for the day-to-day running of their home will mean that they will have to cut down on other expenses, such as eating out or going abroad. The ripple effect on their lifestyle, and on the economy in general, will be strong.

Let us also remember that, until now, the government has decided to absorb the added costs of the energy sector, which also includes fuel. If these had to be passed on the consumer, the problems for many families and businesses will increase.

The time will then come for the government to announce what the cost of living adjustment is going to be. That will be officially announced in the presentation of the budget for 2023, but this will happen not before discussions with the stakeholders.

Unions will be pushing for the highest possible adjustment; employers will seek to limit the damage, so to speak. There is already talk that the COLA could hit around €8 per week, a cost that could lead to worsen the situation of some companies that are already struggling to make ends meet. Needless to say, this wage increase could then be again passed on to the consumer, as companies will aim to “retrieve” the extra costs incurred via the wage adjustments to their employees.

Over the past years there has been talk of changing the mechanism that leads to the establishment of the COLA. So far, matters have remained as they were.

Whatever system is eventually used, it is urged that both the unions and the employers, with the government playing also an important role, seek a reasonable way forward.