Inflation up after oil price rises

RISING oil prices have pushed up the annual rate of inflation to 1.7% from 1.4%, the highest monthly increase since August 2002.

Increases in education (6%), health (5.8%), alcohol, other drinks and tobacco (3.6%), transport (3.5%) and restaurants and hotels (3.3%) all helped push up costs in May.

Chief economist Austin Hughes said inflation could rise to 2.5% in July, with recent rises in drink prices yet to kick-in. However, the figure for the year should average out at 2%.

The latest figures from the Central Statistics Office show energy prices, including oil, gas, ESB and petrol, have increased by 7% in the past 12 months. Water, waste and other local charges have gone up by 25% in the same period.

The upturn in inflation will strengthen the unions as they negotiate the latest pay deal with employers.

Talks on a new national wage deal will continue over the weekend. Having received 7% for the first half of the current three-year Sustaining Progress agreement, unions are anxious to match that figure for the next 18 months.

On a more positive note, Beamish & Crawford said yesterday it would not pass on the recently sanctioned price increases on alcohol until September 1.