Headline annual inflation in the Irish economy eased back to 8.2 per cent in December, down from 8.9 per cent the previous month, fuelling hopes that the current spike in prices may have peaked.
The latest consumer price index from the Central Statistics Office (CSO) show prices fell by 0.2 per cent month-on-month in December on the back of a 2.6 per cent fall in transport prices due to lower prices for diesel and petrol. The cost of alcoholic beverages and energy were also down on a monthly basis.
Nonetheless, the annual rate of price growth (at 8.2 per cent) was still near a four-decade high and more than four times the European Central Bank’s target rate of 2 per cent.
Prices have been rising on an annual basis since April 2021 and inflation has been above 5 per cent for 15 straight months.
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The main drivers of higher living costs were energy, food and housing.
Electricity, gas and other fuels were up over 25.9 per cent year-on-year. Within this category, electricity prices were up 62.7 per cent on this time last year, while gas prices rose by a whopping 86.5 per cent.
The figures showed the cost of home heating oil has soared by 39.9 per cent in 12 months.
Another driver of price growth was food with prices across the board up 12.1 per cent on this time last year. Milk, cheese and egg prices were up by over 21 per cent while bread and cereals were up by 12.2 per cent, and the cost of meat up by 14 per cent.
Within the housing category, private rents rose by 10.6 per cent over the last 12 months.
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“While the latest CSO figures show that inflation eased off slightly in December, at 8.2 per cent, it is still very high and a huge burden on many households,” Marian Ryan of consumer advocacy group Taxback.com said.
“Furthermore, there are a number of tax changes in the pipeline which will further push up prices for consumers in the coming months,” she said, noting the reduced 9 per cent VAT rate which currently applies to energy bills – as a way to help people manage the cost-of-living crisis – will be increased to 13.5 per cent from the end of February.
“Given the difficulties that so many people are still facing navigating the price squeeze, the Government needs to give serious consideration to extending that reduced 9 per cent VAT rate on energy bills,” she said.
