Consumer prices set to plunge by 4% to 5%
The cost of living plunged in the year to the end of April at the fastest rate since the middle of the Great Depression of the 1930s, according to the CSO.
Prices fell 3.5% in the last year and by 0.8% in April against March. Aside from last month when high-street prices remained steady, the value of consumer goods has been falling every month since October last year.
Ulster Bank economist Lynsey Clemenger expects prices to fall by an average of 4.3% this year while the Department of Finance is expecting a 3.9% drop.
The biggest driver was a near 40% annual drop in mortgage interest costs.
Rent prices are down 14% while clothing fell 13% and shoe prices dropped 11%. Petrol prices have fallen by 11% in the year and diesel is down close to 19%. Carpet prices are down 11% and sea ferry prices are down 22%.
There were some areas however, where consumers have had to pay more. Cigarette prices are up 12% in the year, gas prices surged 20% and electricity by 17%.
Hospital costs are up 9% and restaurant prices 2% while beer is up 3%. Insurance costs have soared 18.5% in the year with motor insurance rising 13% and health insurance up 20%.
Ulster Bank said further falls were expected but warned that shops were battling a so-called consumer strike as people’s spending power is hit by higher taxes and unemployment.
However, ISME chief Mark Fielding said companies were still being hit with some of the highest energy and labour costs in Europe along with high commercial rates. The fact remains that the Government has done little to alleviate the high cost environment for business and are missing an opportunity to regain lost competitiveness,” he said.
Based on a European measure that excludes mortgage interest relief, prices in Ireland fell the most in the year to the end of March across Europe.
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