Inflation eases to 8.7% in August but prices continue to rise

The Consumer Price Index for the year to August shows it is the 11th month in a row that the annual inflation rate is above 5%.

“The annual change in transport costs reflects a rise in the cost of diesel (+34.6%), petrol (+23.5%), purchase of motor cars (+11.3%) and airfares (+34.2%) compared to August 2021,” said the CSO. 

The price of goods and services increased by 8.7% in the year to August, the Central Statistics Office has said, with the cost of food, energy and transport all still driving the surging cost of living.

The Consumer Price Index for the year to August shows a slightly lower inflation rate than the previous two months, where price rises stood at 9.1% over the year.

Nevertheless, prices are still rising for consumers, up 0.2% on the previous month.

CSO statistician Anthony Dawson said: “Increased energy costs are reflected in the yearly increase of housing, water, electricity, gas and other fuels with electricity up 38.1%, gas up 56.1%, home heating oil up 72.9% and solid fuels up 31.9% in the year.

“The annual change in transport costs reflects a rise in the cost of diesel (+34.6%), petrol (+23.5%), purchase of motor cars (+11.3%) and airfares (+34.2%) compared to August 2021.” 

The CSO also published data on the rise in the actual cost of items in July 2022, compared to the same month in 2021.

In the year to July 2022, there were price increases in an 800g loaf of white sliced pan (+23c), 2 litres of full-fat milk (+36c) and a pound of butter (+58c).

Food, in general, is up 9.2% in the last year. Bread (up 14.9%) and pasta products (17.6%) have increased by more, as has poultry (up 15.3%) and milk, cheese and eggs (up 15.2%).

Mr Dawson added that this is the 11th month in a row that the annual inflation rate is above 5%.

“Prices have been rising on an annual basis since April 2021, with annual inflation of 5.0% or more recorded in each month since October 2021,” he said.

The Government has faced sustained pressure to provide support to households dealing with the surging cost-of-living in this month’s Budget.

On Wednesday, Energy Minister Eamon Ryan indicated that households would get another energy credit this winter to help them pay their bills.

Activists have also called for increases to core social welfare rates to help struggling families, with many citing the difficult choices facing them in recent times between heating, rent and food.

With Energia becoming the latest to raise their prices on Wednesday, all of the major energy companies serving Irish homes will rise their prices in the coming weeks.

The inflation figure for energy in today’s CSO figures does not reflect the future rises in energy due to kick in in October.

Separately, at European level, it’s widely expected the European Central Bank will today raise interest rates in a bid to curb the impacts of inflation. Average mortgage repayments are set to rise on foot of the move.