Consumer prices surge at fastest pace for two years — as utility and hairdressing charges jump     

Hairdressing prices jumped 8.5% while electricty prices are up 9.4%

Consumer prices surged by an annual rate of 1.7% on the back of rising oil prices, as well as price hikes across many services and hospitality industries as they came out from lockdown.  Picture: Larry Cummins

Irish consumer prices surged by an annual 1.7% — the fastest pace for over two years — as electricity and heating and other utility bills surged on the back of global oil price hikes, while the costs of hairdressing and restaurants and hotels and other personal services climbed on their reopening, CSO figures show. 

There were "notable" price rises across a range of housing, water, electricity, gas and other fuels last month from a year earlier, while a range of other goods that make up Ireland's basket of goods and services, including clothing, food, and the costs of communications, fell in May. The hike in electricity and gas bills will come as no surprise to households after retail utility suppliers released a series of price increases in recent weeks, citing the surge in the price of global oil. Huge stimulus of the economies in the US and Europe has helped the world economy to emerge from the Covid economic recession at a faster than expected pace but has driven up key oil prices, in particular.   

Economists had also anticipated the rise in the prices charged by personal services such as hairdressing after businesses came out of the long lockdown but some of the price hikes will still likely surprise. 

 

Source: CSO

 Oil spike  

Electricity and gas prices climbed by 5.4% from May 2020 and transport costs, which are also heavily influenced by global oil prices, rose 3.6%, the CSO figures show. Hairdressing prices rose 1.2% in the month and are now 8.5% higher in the year as salons and barbers reopened, while the prices charged by restaurants and hotels are 2.9% higher from a year earlier.  

The cost of outpatient services were slightly lower in the month but are now 3% more expensive from May 2020. Other closely-watched prices of services such as insurance and rents were also significantly higher. Private landlord rents eased by 0.2% since April but were 2.6% higher as the lockdown eases compared with a year earlier.  And other housing costs, as measured by the costs of mortgage interest costs charged by banks, rose 0.4% in the month and were 2% higher in the year. .

Meanwhile, the costs of car insurance were 2.2% lower in the month and almost 7% lower from May 2020, according to the CSO figures. The costs of insuring the home were unchanged in the month and 2.8% higher from a year earlier.  The EU measure of harmonised prices showed that prices across Europe rose sharply in May.