Higher energy prices drove Irish inflation to a three-year high of 4.3 per cent in October, according to the latest official figures.
The consumer price index (CPI) indicated prices across the board rose by 0.7 per cent between September and October.
The sectors with the highest rate of price growth over the past 12 months were housing, water, electricity, gas and other fuels (up 10.7 per cent) and transport (up 9 per cent).
The housing, water, electricity, gas and other fuels category, which has the biggest weighting in the CPI’s index, accounted for 1.66 per cent of the overall 4.3 per cent.
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This was primarily due to a rise in the cost of home heating oil, electricity, gas, rents and mortgage interest repayments, the CSO said. Home heating oil is now over 74 per cent more expensive than at this time last year.
Mortgage costs are also up significantly – by 10.8 per cent year-on-year.
The European Central Bank (ECB) is expected to increase interest rates again next month in response even though falling oil prices, linked to reports the US is now unlikely to strike Iran again, has improved the inflationary outlook.
Adding to expectations of a rate hike, ECB chief economist Philip Lane told Bloomberg Television this week that it would be “prudent” to raise rates in December if the data does not meaningfully change.
The latest CPI indicated transport costs rose due to higher diesel and petrol costs as well as increases in the cost of airfares.
Diesel prices were up nearly 28 per cent on this time last year while petrol prices were up 16 per cent.
The CSO said the national average price for a litre of diesel at forecourts in October was €2.19, an increase of 48 cents on the same time last year. Petrol prices were on average up by 28 cents to €2.02 a litre.
The headline 4.3 per cent readout for inflation for October was up from 4.1 per cent the previous month and was the highest rate of inflation recorded since December 2023.
The underlying rate, which excludes energy and food, grew by 3.1 per cent in the 12 months to October.
The CSO said prices across all 13 categories of products and services, with the exception of education, rose in the 12 months to October.
Food prices were up just 0.8 per cent in annualised terms. However, there is concern that the surge in energy costs linked to conflict in the Middle East will eventually translate into higher food prices for consumers.
The CSO noted that the national average price of a pint of stout in licensed premises in October was €6.33, up 26 cents in the year, while a pint of lager was €6.75, up 25 cents compared with October 2025.
Rossa White, chief economist at EY Ireland, said the latest figures show inflation “is still embedded at a high level”.
“Services and goods make up roughly half of the basket each. Goods prices are largely out of our control, whereas services are influenced by domestic conditions,” he said.
“The big change in October was for goods, where price growth hit 5 per cent on higher energy costs,” he said, suggesting inflation for goods should ease over the next months, barring another geopolitical shock
“Today’s public sector pay deal is most relevant for the impact of service prices on overall inflation,” he said.
“The annualised increase in pay out to the end of March 2029 works out at 3.8 per cenr. That is above average inflation over the last decade of 2.4 per cent, or the euro area target of 2 per cent,” White said.
