Increased rents and fuel costs push consumer prices higher

Consumer prices rose by 0.8 per cent in the year to July on the back of higher rents and utilities, new figures from the Central Statistics Office (CSO) show.

According to the data, increases in housing, water, electricity, gas and other fuels, rose 5.4 per cent compared to July 2017, while prices paid for alcohol and tobacco increased 2.8 per cent.

Transport and restaurant and hotel costs also jumped, rising 1.8 per cent versus July 2017.

The largest annual decreases in prices were in furnishing and household equipment, which fell 3.9 per cent.

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The latest data comes a day after Eurostat released new figures showing Irish consumers pay considerably more for gas and electricity than other Europeans.

Consumer prices were up 0.4 per cent in July versus the previous month with the most significant price changes in transport, which was up 3.2 per cent, and restaurants and hotels, up 0.8 per cent.

Over the months, the cost of clothing and footwear fell by 5.6 per cent while furnishings and household equipment costs were down 1.4 per cent.

Stronger

Merrion chief economist Alan McQuaid said the latest figures were stronger than expected but still showed that overall inflationary pressures remain fairly muted.

He said that despite strong Irish economic growth, there is as yet little sign of sustained pressure on the prices front. Mr McQuaid added that with a similar situation happening elsewhere in the Euro zone, the European Central Bank would likely be in no hurry to increase interest rates.

“Ireland’s average inflation rate was 0.4 per cent in 2017, up from zero in 2016. Although the average for the first half of 2018 was only 0.2 per cent, the average for the year as a whole should pick up to around 0.7 per cent,” said Mr McQuaid.