Inflation hits 1.6% in June as home costs rise

Housing and utilities a significant factor

Prices for restaurants and hotels were 1.7 per cent higher year on year.

Prices for restaurants and hotels were 1.7 per cent higher year on year.

 

Consumer price inflation hit 1.6 per cent in June as costs for home heating oil, utilities and rents increased.

That was the second largest annual change recorded in more than two years, following the 1.7 per cent rate recorded in May.

Housing and utilities were a significant factor in the hike, rising 4.9 per cent. Transport cost were 3.1 per cent higher, pushed up by rising costs for diesel and petrol, while health costs increased 2.4 per cent.

Prices for restaurants and hotels were 1.7 per cent higher year on year, with decreases in the cost for hotel rooms offset by higher prices for alcoholic drinks and food consumed in licensed premises, restaurants and cafes.

Change

“In June 2021, the largest increase in the year could be seen in housing, water, electricity, gas and other fuels , which contributed to almost half of the overall change,” said statistician Colin Cotter.

“This increase was mainly caused due to a rise in the cost of home heating oil, electricity, gas, higher rents and mortgage interest repayments.”

The price hikes were partially offset by decreases in communications, which declined by 1.6 per cent, and furnishings, household equipment & routine household maintenance, which fell 0.8 per cent.

On a monthly basis, prices rose 0.2 per cent compared with May, the eighth consecutive month that costs have increased. That rise was fuelled by increases in transport and health costs, and represented a slight moderation from June of last year, when prices increased by 0.3 per cent in the month.

Restrictions

“As a result of easing restrictions and recent reopening of outdoor dining, the June 2021 CPI represents the lowest requirement for the imputation of prices in any month since the beginning of the pandemic. Price change is imputed for items in the basket where consumption has not recommenced, or it was not possible to collect reliable price information,” Mr Cotter said.

“It was estimated that households, on average, were unable to consume 1.1 per cent of the goods and services in the CPI basket of goods and services in June. In contrast in June 2020, imputation of price change was required for 26.1 per cent of the goods and services in the CPI basket.”