Inflation stays at 5.1% in April

The annual rate of inflation remained at 5.1 per cent in April, figures from the CSO have shown.

The annual rate of inflation remained at 5.1 per cent in April, figures from the CSO have shown.

According to the Central Statistics Office, consumer prices rose by 0.8 per cent in the month, while inflation for the year remained static at 5.1 per cent.

This means inflation is hovering just below the 5.2 per cent high hit in January this year.

Once again, housing, electricity, gas and other fuels saw the most significant increase, at 22.8 per cent over the year, and 2.7 per cent in the month, fuelled by higher average mortgage interest repayments.

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The average mortgage repayment grew by 6 per cent in April, as the Central Bank interest rate hike of 0.25 per cent implemented in March hit home.

Transport prices also increased significantly, rising 1.2 per cent month on month, as petrol, diesel, air fares and bus fares also spiralled.

The EU Harmonised Index of Consumer Prices increased by 0.5 per cent in the month, leaving the annual rate unchanged at 2.9 per cent.

Labour finance spokeswoman Joan Burton said the record of the Government "stands in stark contrast to the 1.5 per cent rate they inherited from Labour's finance minister Ruairí Quinn in 1997.

"Moreover this rate is well in excess of the European average and makes a mockery of Brian Cowen's prediction in last December's Budget that inflation would average 2.6 per cent in 2007," she added.

The Irish Congress of Trade Unions congress said the high rate of inflation was "a source of real alarm" and called for efforts to be increased to control the cost of living.

"This puts real pressure on pay increases negotiated under Towards 2016, when all forecasts were for a rate of around 3 per cent. The persistence of this high rate shows clearly that official efforts must be redoubled, and there must be a real focus on this problem, at a national level," said congress economic advisor Paul Sweeney.

"Congress cannot accept a situation where peoples' living standards are slowly being eroded and undermined."

Employers' lobby group Ibec said the main drivers of inflation - interest rates and oil prices - were external to the Irish economy.

"It now looks like it will be later this year before the ECB reaches the top of its current tightening cycle, but once it does inflationary pressures should ease considerably. Higher euro area interest rates will also lead to a stronger exchange rate against the dollar, which will further reduce price pressures in the Irish economy," said Ibec senior economist Fergal O'Brien.

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist