The spike in inflation still has some way to run
Airfares are up 50%, while hotel accommodation is running at 15.5%. Picture: Larry Cummins
Ireland is no different from other countries experiencing a marked rise in inflation over the past year. The annual rate of CPI (Consumer Price Index) inflation stood at 2.8% in August, up from -1.5% last October. The rise in inflation, though, is quite narrowly based. The CPI rate excluding energy stands at 1.9%, reflecting the fact that energy price inflation is running at 16% year-on-year (yoy).
There are other pockets of high inflation in the economy as it re-opens following the lifting of Covid restrictions. Airfares are up 50%, while hotel accommodation is running at 15.5% and package holidays are rising by 6% yoy. Private residential rents are up 4.5%, while car prices are rising at over 7% yoy. It should be noted, though, that many of these steep price rises represent an unwinding of big price declines during 2020.
