Rising energy costs lift inflation to 5%

Rising housing and energy costs pushed the annual rate inflation higher last month, according to the latest data from the Central Statistics Office (CSO).

The CSO's consumer price index, which measures a typical basket of goods and services, showed an annual increase of 5 per cent in November, up from a rate of 4.8 per cent in October. This measure of inflation includes mortgage interest costs.

Housing costs - including electricity, gas and other fuels - have increased by 15 per cent this year, with education costs showing the next largest rise of 6 per cent.

Food prices have risen by 5.6 per cent over the year, with alcohol and tobacco prices rising 5.5 per cent.

However, clothing and footwear prices have shown the greatest month-on-month price rises, increasing 1.8 per cent, followed by higher petrol and diesel costs, which rose 1.4 per cent between October and November.

According to the CSO, the annual rate of services sector inflation for was 6.4 per cent last month.

Jack O'Connor Siptu president condemned Government complacency on inflation and its failure to index tax credits and bands in the budget.

"This Government has such a head-in-the-sand approach to our current 5 per cent rate of inflation that the Minister for Finance could not be bothered mentioning the Consumer Price Index, even once, during last week's Budget speech", said Mr. O'Connor.

"As further increases in interest rates have ceased, their still high, but easing contribution to current inflation is now being offset by rising food prices, with bread and cereals up 10 per cent on last year and milk products up 14 per cent."

Labour party finance spokeswoman Joan Burton said the inflation figures were worrying for families on low incomes.

"In the recent budget, Finance Minister Brian Cowen claimed that increased social welfare rates would exceed cost of living increases, but the truth is that inflation for people on dependent on such payments is much higher than for the population as a whole".

Richard Bruton, Fine Gael deputy leader and finance spokesman said inflation had swallowed up the tax relief's granted in the budget.

"Rising inflation is turning the screw on the low paid at work who were also the big losers in last week's budget," he said.