Rising insurance pushes prices up

Rising insurance costs helped push prices up by a half per cent in September. The end of summer sales also saw clothing and footwear prices jump by 2.4 per cent in the month. The annual inflation rate remained at 4.5 per cent but Opposition parties were quick to condemn the figures released yesterday by the Central Statistics Office.

The cost of medical insurance and higher house premiums were cited as part of the reason for the 2.7 per cent rise in miscellaneous goods and services. Utility prices also jumped as did eating and drinking out of the home.

Over the year, the largest rises have been seen in miscellaneous goods and services - which includes insurance and the likes of hairdressing and beauty treatments - health and education.

Economists said the figures were still stubbornly high. "Back in the early summer, it looked like the rate of increase was declining, now it is on the rise again," said Davy chief economist Mr Robbie Kelleher. "A rate of 4.5 per cent is pretty high and two successive months with half-percentage point rises is discouraging."

He warned that the rate could end the year somewhere between 5.5 and 6 per cent if the Minister for Finance were to increase indirect taxes on items like tobacco and alcohol in the Budget.

The Small Firms Association said the persistence of high inflation was not a major concern. "Of greatest concern is that inflation is being created in the regulated sectors of energy, education and health," said director Mr Pat Delaney.

"Within the traded sector, inflation is in line with euro-zone competitors but in the domestic service sector, inflation is averaging 8.5 per cent."

Mr Alan McQuaid, economist at Bloxham Stockbrokers, said the figure, which is more than double the EU average, poses problems for the Government.