Inflation at lowest level since 2010
The Consumer Price Index (CPI) is now at its lowest level since Nov 2010.
Of the 12 components that make up the CPI, only four rose during last month. One of the more interesting trends was housing-related inflation. Even though house prices continue to stagnate or fall, rents are moving in the opposite direction — increasing by 0.6% over the course of the last month.
Anecdotal evidence suggests that many couples with apartments in negative equity are looking to rent up rather than trade up.
Housing, water, electricity, gas, and other fuel costs increased by 0.3% over November but fell by 3.1%, year on year.
Food and non-alcoholic beverages prices rose by 1% between Nov 2011 and Nov 2012 and were unchanged over the month. Alcohol and tobacco fell by 0.5% during the month, but rose 3.5% over the past year.
“In all, with the CPI having fallen in five of the last six months, the data show further respite for Irish consumers on the prices front, which is welcome news given the domestic backdrop,” said NCB economist Philip O’Sullivan.
“Looking ahead, we would expect to see the rate of inflation pick up over the coming months on the back of the indirect tax increases flagged in last week’s budget, rising mortgage costs, and also public transport fare hikes.”
Transport prices fell during the month on the back of declines in the cost of air fares, which were down 5.1%. Petrol was down 3.7% and diesel fell by 1.8%.
Ongoing price deflation in the telecoms space was behind the fall in communications prices, which were down 4.4% over the past year.
Another sharp monthly decline, 5.4%, versus the 4.2% month-on-month drop seen in October, in the cost of accommodation services was enough to keep prices in the restaurants and hotels segment in negative territory.
Health costs and charges fell by 0.1% in November and increased 0.1% year-on- year. Health cost inflation was running at 2.6% in the year leading up to Nov 2011.
Education costs were down 4.7% over the past 12 months.
