Finance guru Eddie Hobbs says Ireland will go into recession by AUTUMN - and working people will be hit hardest.
The controversial Corkman predicts Ireland will go into economic downturn within months.
In an interview with the Irish Mirror, Hobbs said: “We will likely be in recession by early Autumn, but definitely by Winter. All the signs are there. Right now, we are in a vortex, on the way to recession. We’re looking at the economy contracting, job losses, business closures. It’s a f**king firestorm.”
Read More: What does Eddie Hobbs do nowadays? The controversial economist who just returned to RTE screens
He added: “The next financial crisis is upon us, except this time, it’s in the guise of the runaway cost of living. The price will be paid by the working people getting poorer.
“We may as well start talking about it. At the moment, there is a complete suspension of reality going on. We’ll have to change all our budgetary positions - they’re redundant. Throw the political manifestos down the toilet.”
Outspoken Hobbs was the consumer champion of the Celtic Tiger and hosted Rip-Off Republic, the RTE TV show that exposed the high cost of living and working in Ireland.
He took a hit when he was involved in a boomtime-era property fund in the US, which lost most of the €13m invested, leaving hundreds of people - including Hobbs himself, who invested €600,000 - out of pocket.
Yet despite what the nation went through in the recent past with boom and bust, he believes it’s worse than ever now.
Have your say in the comments below.
He says the wealth gap has not been as wide since the Victorian period:
“We’re rather close to when Dickens wrote Hard Times. Those most in danger are service workers and tradespeople on average wages with no safety net. The likes of the plumber of the electrician, on low wages in the private sector - 93% have no pension.
“The woman behind the counter in the local SuperValu who was there all through lockdown. They’re on close to minimum wage or just above it. That’s who I think of.”
Hobbs explains that Europe is in a period of “stagflation” - and what follows next is recession.
“Stagflation is when the inflation rate is running well above the economic growth rate. What that basically means is costs are rising faster than the economy is growing.
“Workers have no chance of recovering the losses they’re experiencing against inflation. They just can’t. People automatically go backwards. You’re in reverse gear.”
However, house prices won’t crash as they did in the last recession.
“The Central Bank has its foot on the throat of the credit under-writing in Ireland. Prices will flatten by 10% to 15% maybe, but that’s more to do with ‘demand destruction’ which is when they’ve squeezed it and there’s no-one left who can afford those prices.
“Then you’re at the apex and there’s only one way of going, which is down.”
He says the lockdowns of the pandemic triggered the rise in inflation. “It cost us €40billion to do lockdown. We completely overdid the money-printing. It’s going to end in inflation.”
The war in Ukraine is worsening the problem. “We had inflation before Putin rolled across the border on February 24. It’s exacerbating it.
“We’re looking at rationing electricity next winter. We will experience unaffordable prices. The shock of energy rationing and food rationing is going to cause a change of mindset.”
Ireland is the worst place to be in Europe at a time of such inflation, due to legacy issues.
“We enter the epoch with a vast housing crisis, a dysfunctional health system, and a civil service where risk-taking is punished and doing nothing gets you promoted.
“Politically, we’re facing such challenges, we will need a national unity Government.
“We’re in a state of war. It’s incumbent on the opposition and current government to get together and form an arrangement where they are supportive of each other. We can’t afford politicking. It’s time for unity, not division.”
He says what’s happening is the way of the world at the moment.
“Politicians know it is political decisions that have caused this. The world is set up to enrich the rich. Billionaires have become squillionaires in the last 15 years. They’re making obscene amounts of money and power in the last decade. They’re on a different planet to the rest of us.”
And Rip-Off Republic is back, he notes.
“Gouging is going on, prices are rising. It’s a bonanza for some businesses. ‘Put up the prices until they scream!’
“There are genuine price pressures in the background, but they’re adding them on - and adding a bit more. They’re hiding gouging behind the inflation increase.
“It’s human behaviour. The people gouged by the gougers - if they had a chance to gouge, they’d gouge themselves.”
Get breaking news to your inbox by signing up to our newsletter
