Higher housing costs turns deflation into inflation in August

Higher housing costs turned deflation into inflation in August, according to the latest Consumer Price Index.

After several months of negative price growth, Irish inflation rose to 0.4 per cent last month, reflecting an upward swing across the euro area, where inflation is now running at 1.5 per cent.

The index for August indicated the most significant monthly change was in the area of clothing and footwear, with prices rising 6.1 per cent.

However, the underlying trend is being driven by an uptick in the cost of private rental accommodation, which rose by nearly 1 per cent in August and by 7.3 per cent year on year.

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While petrol and diesel prices were subdued in August, they are up by 3.6 per cent and 5.4 per cent respectively on a 12-month basis.

The figures reflect a general pick-up in euro-zone inflation as a whole amid speculation the European Central Bank may now move to taper its long-running stimulus programme.