Fuel prices push inflation higher
Consumer prices rose in March as the annual inflation rate edged up to 2.2 per cent, new data from the Central Statistics Office showed today.
Higher energy costs and prices for transport, education and alcohol helped lift the index marginally from the 2.1 per cent recorded in February, although some sectors saw prices fall over the 12-month period.
The cost of education was 9.4 per cent higher than March 2011, while transport costs rose by 7.6 per cent due to higher fuel costs and a rise in airfares.
Tobacco and alcohol increased by 3.9 per cent, but the rises were partly offset by a decrease of 2.1 per cent in the cost of household equipment and maintenance, and a 0.7 per cent fall in prices for clothing and footwear.
On a monthly basis, more expensive petrol and diesel prices hit consumers, while clothing and footwear prices recovered from the sales, leading to a 1 per cent rise in overall prices for the month.
A rise in health insurance premiums – which pushed the cost of miscellaneous goods and services higher - also contributed to the monthly rise in inflation.
The rate of inflation for services was 3.3 per cent over the year to March, and 3.7 per cent excluding mortgage interest payments. Goods prices, meanwhile, rose by 1.0 per cent.
When prices for tobacco were excluded from the index, consumer price inflation was 1.1 per cent higher in the month and 2.1 per cent in the year.
"Today's CPI release suggests that price pressures in the economy are somewhat stronger than we expected," Davy chief economist Conall Mac Coille said.
"Stronger CPI inflation will eat into households' real incomes, which are already under pressure from weak nominal pay growth and budgetary measures."
The Small Firms Association said the rate of inflation was a concern, with assistant director Avine McNally blaming the increases on public utility costs, such as housing, water, electricity, gas and transport.
She called on the Government to act on business costs that pose a burden on small businesses.
"The Government needs to take firm action to reduce the costs it imposes on the economy, so that it is not having knock-on negative impacts on small businesses who are still fighting for survival," she said.