Inflation eases in September
The annual inflation rate eased to 1.6 per cent in September, falling from 2 per cent recorded in August.
The rate of price hikes also eased month on month, with prices falling by 0.1 per cent last month compared with August.
The Central Statistics Office picked out increases in the cost of education and transport, which rose by 9.6 per cent and 7.9 per cent over the year respectively, as key factors in pushing prices higher.
Those rises were partially offset by a decrease in the cost of housing and utilities, which was 2.8 per cent lower compared with September 2011, and communications, which fell by 2.6 per cent.
But although consumers were cheered on one hand by the European Central Bank's decision to cut interest rate, bringing some relief to mortgage holders, rising energy prices were set to put the squeeze on pockets.
"The upward pressure on energy bills is likely to continue with a number of energy providers set to increase prices over the coming months," Goodbody economist Juliet Tennent said.
Over the month, the cost of transport was 1.1 per cent lower as the price of airfares fell by almost 17 per cent. Fuel costs were higher, however, with both petrol and diesel rising by 3 per cent.
Transport costs are set to increase further for hard-pressed motorists and businesses. The National Roads Authority is set to meet next week to discuss an increase in road tolls, and it is widely believed that a 10 cent rise will be implemented from Jnauary 1st. Independent operators are expected to follow suit.
Clothing and footwear prices rose by 2.9 per cent in September as the traditional seasonal sales came to an end.Garments and accessories showed the highest jump, rising by 3.5 per cent and 2.1 per cent respectively, with footwear rising by 0.9 per cent.
The annual rate of inflation for services was 1.2 per cent, with goods rising by 2 per cent.
The HICP rate, which is used for EU comparative purposes and eliminates certain items such as mortgage interest and motor tax, rose by 2.4 per cent over the year, falling from the 2.6 per cent rate recorded in August.
On the month, prices were down 0.1 per cent.
"Looking ahead, announced increases in mortgage costs, energy prices and public transport fares will place upward pressure on overall consumer prices over the coming months," NCB chief economic Philip O'Sullivan said. "This pressure, allied to the further tax increases planned for December’s budget, will act as a headwind to consumer spending growth for some time to come."