Rate of inflation remains unchanged at 0.7% in July

The rate of inflation remained unchanged at 0.7 per cent in July as rising prices for transport and alcohol offset falls in the cost of clothing, footwear and household furnishings.

The latest data from the Central Statistics Office (CSO) show consumer prices in July fell by 0.1 per cent on the previous month.

Prices on average, as measured by the CSO’s Consumer Price Index, were 0.7 per cent higher in July compared with the same month last year.

The CSO said the cost of transport went up by 0.9 per cent in July mainly due to an increase in airfares and higher petrol and diesel prices.

Alcohol and tobacco prices also rose by 0.7 per cent during the month due to higher prices for beer, spirits and wine sold in off licences and supermarkets.

The price of food and non-alcoholic beverages rose by 0.4 per cent with higher prices seen higher across a range of products.

Conversely, the most significant monthly price decreases were recorded in clothing and footwear (-6.8 per cent) and household equipment and furnishings (-0.8 per cent) fell due to the traditional summer sales.

The most notable changes in the 12 months to July were increases in alcoholic beverages and tobacco (+6.2 per cent), education (+4.8 per cent) and food and non-alcoholic beverages (+2.0 per cent).

During the same period, there were decreases in furnishings and household equipment (-3.3 per cent ), clothing and footwear (-2.9 per cent) and communications (-2.1 per cent).

“In all, the muted headline CPI continues to provide a degree of respite for Irish consumers,” Investec’s Philip O’Sullivan said.

“ However, in terms of the outlook we would caution that any further increases in indirect taxation in October’s budget could translate into upward pressure on prices in the short term,” he said.

The CSO figures show the annual rate of inflation for services was 1.4 per cent in the year to July, while the sub-indice for goods showed no change in the year.

Services, excluding mortgage interest repayments, increased by 2.3 per cent in the year since July 2012.