Higher fuel and clothes prices push up cost of living in August

HIGHER FUEL prices and more expensive clothes led to an increase in the cost of living last month, according to the Central Statistics Office.

The latest inflation figures show consumer prices, as measured by the Consumer Price Index, were 2 per cent higher last month compared with August 2011. Consumer prices increased by 0.6 per cent in August, compared to a rise of 0.2 per cent recorded in the same month last year, according to the figures published yesterday.

The most significant monthly changes saw clothing and footwear prices increase 6.6 per cent, transport rise 1.6 per cent, and furnishings, household equipment and household maintenance go up 0.7 per cent. There was a fall for housing, water, electricity, gas and other fuels, which decreased by 0.5 per cent due to lower mortgage interest repayments.

However, this was partially offset by a rise in home heating oil.

The most notable price changes in the year were increases in education (+9.6 per cent), transport (+8.3 per cent), miscellaneous goods and services (+5.4 per cent) and alcoholic beverages and tobacco (+3.3 per cent).

Transport prices were up mainly due to an increase in fuel prices and airfares, while the price of education was higher due to increased third-level costs.

However, prices fell for furnishings, household equipment and routine household maintenance (-2.3 per cent), communications (-2.0 per cent) and recreation and culture (-1.4 per cent).

Housing, water, electricity, gas and other fuel prices fell mainly due to lower mortgage interest repayments.

As with the monthly figures, this was partially offset by an increase in the price of home heating oil, the CSO said.

The annual rate of inflation for services was 2.3 per cent in the year to August, while goods increased by 1.6 per cent.

Services, excluding mortgage interest repayments, increased by 4.1 per cent in the year since August 2011.

The EU measure of prices, which excludes mortgage repayments, rose by 0.8 per cent in the month, compared to an increase of 0.2 per cent in August 2011. Prices on average, as measured by the EU Harmonised Index of Consumer Prices, were 2.6 per cent higher in August compared with August 2011.

The Irish Small and Medium Enterprises Association (Isme) yesterday warned of the continuing threat to business competitiveness from State-controlled costs, which it said was being masked in the overall figures.

The association called for a full review of relevant business costs, saying they should be benchmarked internationally.

“The costs imposed by Government on business continue to act as a deterrent on our export-led recovery and sustaining local employment.

“It is essential that these costs are reduced to allow us to compete,” said Isme chief executive Mark Fielding.