Prices fall across Covid-hit economy but mortgage interest costs rise

Prices for many goods and services fell across the Covid-hit economy last month but mortgage interest payments showed significant rises, according to official figures. Pic: Dominic Lipinski/PA Wire

Prices for many goods and services fell across the Covid-hit economy last month but mortgage interest payments showed significant rises, according to official figures.

The CSO said its consumer price index fell by 0.2% in July from June and dropped by 0.4% from July 2019.

However, the figures also show significant moves in prices for key goods and services.

Prices at restaurants, cafes, and fast food takeaways rose by 0.9% from June and 2.8% above July 2019 levels.

Pharmaceutical products rose 0.6% in the month and were 2.2% higher than a year earlier.                     

The closely-watched index of private house rental prices rose 0.2% in the month but has fallen 1.4% from a year earlier. 

Local authority rents were unchanged in July but were 4.4% higher than in July 2019, according to the figures.

Other housing costs were also higher.

Mortgage interest costs were up 0.4% in the month and were 2.9% higher than a year earlier, which may suggest that some lenders are hiking, and not cutting, home loan interest rates.

Apart from health insurance, most other types of insurance costs were lower compared with July 2019.

Health insurance costs although slightly lower, by 0.1%, from June, were 6.3% higher than a year earlier. 

Car insurance costs were unchanged in the month and were 7.6% below levels of July 2019, according to the figures.

The CSO figures show sharp falls in the past year for communications, transport, as well as for housing, water, electricity, and gas, and food and soft drinks. 

The CSO said transport prices fell in the year due to airfares, petrol and diesel.

In housing costs, lower fuel costs in the year were "partially offset by higher mortgage interest payments".      

There were significant increases from July 2019 in education, alcohol and tobacco, health, and in the category of items included in its miscellaneous goods and services.    

In the month, however, the CSO said the most significant price falls included transport and restaurants and hotels, while prices rose for housing and water and fuel costs, as well as for miscellaneous goods and services.