Consumer prices rise at fastest rate in two decades

Consumer prices rose by 5.5 per cent in the year to December, the Central Statistics Office said, the largest change seen in 20 years.

That follows an annual increase of 5.3 per cent recorded in November, and reflects the ongoing pressure on consumers as costs creep steadily higher.

Inflation was driven by a combination of increased prices for transport and energy. Higher prices for diesel, petrol and cars, along with a rise in airfares, contributed to inflation pressures, while rents and mortgage interest repayments also rose, pushing housing costs higher. There was also an increase in the cost of general food products, with the cost of bread and cereals up 3.3 per cent year on year.

This contributed to a rise in prices at a rate last seen in April 2001.

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Month on month, prices increased by 0.5 per cent, the 14th month in a row of inflation. That compares with a rise of 0.3 per cent in December last year.

Increases in the cost of transport, which rose 2.9 per cent fuelled by higher airfares, and furnishings and household maintenance (1.4 per cent) were partly offset by a fall in the price of alcohol and tobacco, which declined 2.1 per cent over the month on lower prices for alcohol sold in supermarkets and off-licences, and a fall of almost 1 per cent in the cost of clothing and footwear due to seasonal sales.

Picking up pace

Prices on average, as measured by the EU Harmonised Index of Consumer Prices (HICP), increased by 5.7 per cent compared with December 2020.The HICP increased by 0.5 per cent in the month, picking up pace from the 0.2 per cent recorded in December 2020.

Prices for energy products rose by an average of 12.3 per cent during 2021. The price of goods increased on average by 1.5 per cent while services rose by 2.7 per cent.

The annual average rate of inflation in 2021 was 2.4 per cent.

The rise comes as the UK recorded a 30-year record for inflation, and house price inflation in the Republic registered another pandemic high of 14 per cent in November.