Fall in consumer prices easing
According to the Central Statistics Office (CSO) prices fell on average by 0.1% in the year to July, with insurance and travel costs showing big hikes. This compares with a decrease of 0.8% recorded in July of last year.
The CSO said the cost of education increased by 9.2%, while housing, water, electricity and gas was up 5.5% in the year.
Food prices were up 0.2% in the month, while non-alcoholic drink prices increased 1.4%.
Due to the summer sales, clothing prices were down just over 7% last month. However, this was a smaller drop than had been expected given that clothing costs were down 11.2% in July last year.
Davy stockbrokers analyst Aidan Corcoran said the figures show prices are stabilising.
Employers group IBEC said, however, that there needs to be price cuts in some areas of the economy.
IBEC senior economist Fergal O’Brien said: “The fact that the deflationary period is almost over is no bad thing. The trend so far this year has been largely as expected, and the return to modest levels of price growth over the coming months will have positive implications for the Exchequer and for businesses.”
Director of the Small Firms Association Avine McNally said businesses still face high running costs.
“Small Irish businesses have taken harsh steps to regain cost-competitiveness, but many costs are either rigid or are regulated by the state and have not fallen.”
Meanwhile, consumers can expect hefty hikes in food prices in the coming weeks. Experts have warned that, as commodity prices, such as wheat, continue to rise, so too will certain food costs.
According to the European Commission prices for the main dairy commodities have increased significantly since June last year.
Last month butter and milk costs rose by 0.2% and Trinity College lecturer Constantine Gurdgiev said that consumers should expect double-digit price hikes, especially with dairy products, in the coming weeks.
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