Prices up in December after three months of falls

Consumer prices in Ireland increased very marginally last month, following three consecutive months in which they fell.

Latest Consumer Price Index figures from the Central Statistics Office show December’s inflation rate rose by just 0.1 per cent month on month.

In November, prices dropped by 0.4 per cent on the previous month. Prices also fell in September and October.

Comparing the full year with 2011, consumer prices rose by 1.7 per cent. This was lower than the full-year change between 2010 and 2011, which stood at 2.6 per cent.

The deceleration in the rate of inflation in 2012 took place despite the introduction of a two percentage point increase in value added tax at the beginning of the year.

The price level in 2012 remained below 2008 levels owing to sharp falls in prices during the worst of the recession.

This is the first time since the mid-1930s that prices have not risen over a four-year period.

In terms of monthly variations, the index recorded increases of 0.7 per cent in restaurants and hotels, and 0.6 per cent in both food and non-alcoholic beverages and miscellaneous goods and services.

Transport costs up

There was a decrease in inflation for the month applying to clothing and footwear of 1.3 per cent. Transport was one of the main factors contributing to the annual change and was due to the increased cost of fuel and motor taxation.

Higher health insurance premiums affected the change in miscellaneous goods and services, while restaurant and hotel prices were affected by an increase in the cost of alcoholic products consumed on licensed premises.

Inflation in the housing,water and fuels category fell, with lower mortgage interest payments being partially offset by increases in the cost of electricity, gas, rents and home heating oil.