No change in consumer prices in April

LOWER AIR fares and a decline in the cost of wine in off-licences and supermarkets offset increases in other areas to leave consumer prices unchanged overall in April, figures published yesterday by the Central Statistics Office (CSO) show.

This compares to a 0.4 per cent rise in the same month last year. As a result, the annualised consumer price index fell to 1.9 per cent in April from 2.2 per cent in March.

The CSO highlighted the impact of the household charge and higher health insurance premium costs as inflationary elements in the April figures. It also highlighted increases in a wide range of food costs.

On an annual basis, the consumer price index rise was fuelled by a 9.4 per cent rise in the cost of education, while transport costs increased by 5.7 per cent, much of its due to higher petrol and diesel prices.

Miscellaneous goods and services increased by 4.1 per cent over the year and alcoholic beverages and tobacco prices rose by 3.2 per cent.

On the flip side, there was a 2.3 per cent decline in the cost of furnishings, household equipment and routine household maintenance. Prices for goods and services in the recreation and culture segment fell by 1.1 per cent while clothing and footwear was down by 0.4 per cent.

The rate of inflation for goods was 1.5 per cent in the year to April with services seeing a higher 2.1 per cent increase. Services, excluding mortgage interest repayments, rose by 2.7 per cent over the 12 month period.

The Consumer Price Index (CPI) excluding tobacco for April remained unchanged in the month and was up by 1.7 per cent in the year.

The index excluding energy products was down by 0.2 per cent on a monthly basis and rose by 0.9 per cent on an annual basis. The CPI, excluding mortgage interest, remained unchanged in the month and rose by 2.1 per cent in the year.

Davy Stockbrokers described the falling inflation rate as a “welcome development for Irish consumers” but warned it was also a sign of continued weakness in the domestic economy.

Goodbody said Government policy was driving domestic inflation with measures aimed at reducing the deficit having an upward effect on prices.

However, it added that it expected some of the Government-driven inflationary pressure to be offset by moderating energy prices in the coming months.

Small business lobby group Isme claimed the latest figures mask rising business costs and called on the Government to take action to restore national competitiveness.

“The sad fact is that, as businesses cut their prices to compete, increased State-influenced costs including energy, transport, local charges, water and waste charges continue to undermine our competitiveness, which is crucial to any economic revival,” said Isme chief executive Mark Fielding.

“It is now imperative that Government reciprocates, by immediately implementing a root and branch review of the State’s influence on the costs to business and addresses these through cost reductions and greater efficiencies,” he added.