Consumer prices rise by 0.4 per cent in August

The annual rate of inflation in August was 0.4 per cent, but new data points to steep increases in the price of drink, tobacco and education and prices paid in restaurants and hotels.The figures also show that the property tax, paid in full this this year for the first time, is feeding into the consumer price index.

At the same time, price data released this morning by the Central Statistics Office show that the month-on-month inflation was 0.2 per cent in August.

This represents a turnaround in the consumer price index last month, as prices in July decreased by 0.2 per cent compared with June. The monthly inflation rate compared with 0.l per cent inflation in the August last year

Such figures include a 6 per cent monthly increase in the price of clothing and footwear in August, although there were decreases in the cost of transport, recreation and culture.

The annual Irish inflation rate last month was marginally below the 0.3 per cent euro zone rate, a level well below the European Central Bank’s offical target of below but close to 2 per cent. This prompted a further series of extraordinary ECB interventions last week as it strives to avert the threat of deflation in the single currency area.

The annual inflation figure points to a 4.5 per cent rise in education prices last month and hotel prices rose 2.8 per cent. The CSO said a 3.9 per cent rise in the price of drink and tobacco reflected higher alcohol prices in off licences and supermarkets.

The price of miscellaneous goods and services rose 2.9 per cent year-on-year, a figure which embraces higher health and motor insurance premiums and the increased costs associated with the local property tax.

The price of communications services dropped 4.6 per cent in the year, which the CSO attributed to a reduction in the cost of telephone equipment and services.

The price of food and non-alcoholic drink dropped 2.6 per cent. According to the CSO, this was due to lower prices for vegetables, meat, bread and cereals.

Clothing and footwear prices dropped 2 per cent in 12 month. The price of furnishings, household equipment and routine household maintenance fell 1.9 per cent. This reflect the reduced cost of furniture and furnishings, household textiles and glassware, tableware and household utensils.