Irish annual pace of inflation eases to 7.7% as energy prices decrease

The annual pace of Irish inflation eased to 7.7% in January as energy price pressures relaxed due to a mild winter.

This rate has fallen significantly below the annual inflation rate of 9.2% in the euro area, which was recorded in December.

“Energy prices are estimated to be to have decreased by 0.1% in the month but are up an estimated 33.1% since January 2022,” said Central Statistics Office (CSO) statistician Anthony Dawson.

The Central Statistics Office, or CSO, published its estimates for the 12 months to January ahead of Eurostat’s latest inflation figures which will be released on Wednesday, February 1.

The CSO based their estimates off of the EU Harmonised Index of Consumer Prices (HICP). The HICP, excluding energy prices, is estimated to have increased by 5.2% since January 2022.

Prices did decrease as the HICP inflation estimate stood at 8.2% in Ireland in the 12 months to December, however inflation continues to bite.

The European Central Bank is poised to raise interest rates by a further by 0.5% this week to try and get inflation under control.

Meanwhile, Arla Foods, the Danish maker of Lurpak butter, expects the cost of dairy products to fall sharply in 2023 in the UK after becoming a hot spot of inflation.

The boss of the UK’s biggest dairy producer said he is confident that all the cost pressures facing its farmers have now passed though.

The remarks open the potential for relief from eye-watering prices for everyday food items that accompanied a cost-of-living squeeze.

Milk, cheese and egg prices provided the biggest boost to rocketing food price inflation in December, official data showed. That reflected soaring cost of feed, fertiliser and fuel that farmers have tried to pass through to shoppers.

Inflation on British groceries jumped to another record high in January with little sign of price rises slowing on consumers’ weekly shop

The rate hit 16.7% in the four weeks to January 22, up from 14.4% in December, reaching the highest level since Kantar started tracking the data in 2008.

German discounter Aldi was the fastest-growing grocer for the fourth month in a row with sales rising almost 27% from a year earlier. Lidl was close behind with an increase of around 24%.

Kantar data on Irish supermarket inflation is expected to be released next week.

- Additional reporting by Bloomberg