Inflation rate falls for fifth month in a row to 3.1%
Inflation has fallen for the fifth month in a row to an annual rate in July of 3.1 per cent, down from 3.5 per cent in June.
The latest Consumer Price Index, prepared by the Central Statistics Office shows that services inflation is running at 4.8 per cent, significantly higher than the rate of 1.5 per cent in respect of goods.
The most significant monthly price changes in July were decreases in clothing & footwear which fell -9.7 per cent owing to the summer sales, and housing and utilities, which fell -3.4 per cent on account lower mortgage payments following the latest ECB rate cut.
The summer sales had a significant impact on clothing and footwear prices, which decreased by 9.7 per cent in the month. Clothing prices fell by 10.4 per cent while footwear prices decreased by 7 per cent.
As a result of the continuing strong competition in this sector, average prices of clothing and footwear have decreased by 4.6 per cent in the year since July 2002.
IBEC economist Mr David Croughan welcomed the fall in inflation and estimated that inflation would fall to about 2.5 per cent by the end of the year.
Howver Mr Croughan pointed out that certain services continued to be totally out of line with the rest of the economy and this had to be corrected. Many of these sectors were publicly administered or affected by government policy.
Examples of inflation rates that are well above the average include water supply and refuse at 19.5 per cent, dental services at 11.4 per cent, hospital services 15.3 per cent and bus and train fares averaged up 12 per cent.