Households remain squeezed by price rises

The national average price for a litre of diesel in July 2026 was €1.76, an increase of 6c on the same time last year.

Irish households remain squeezed by rising prices despite continued drops in car and home insurance premiums.

New data from the Central Statistics Office (CSO) shows the annual price changes remained at 3.4%, with all sectors recording an overall year-on-year increase. The 3.4% rate remains significantly above the target 2% inflation rate set by governments.

The divisions with the largest increases in the 12 months to July were Education Services (+8.9%), Clothing & Footwear (+8.5%), Housing, Water, Electricity, Gas & Other Fuels (+7.7%) and Insurance & Financial Services (+5.5%).

Edel Flannery, senior statistician in the CSO's Prices Division, said the annual change in Education Services reflects a rise in costs associated with third-level education which came into effect last October. "The rise in Clothing & Footwear was due to higher costs for garments, shoes and other footwear. No division recorded an overall decline in prices when compared with July 2025," she said.

“There were price decreases in the 12 months to July 2026 for a pound of butter (-55c), a 2.5kg bag of potatoes, 2 litres of full fat milk, Irish cheddar per kg (all -9c), sirloin steak per kg (-5c) and an 800g loaf of brown sliced pan (-2c). The price of an 800g loaf of white sliced pan was unchanged when compared with July 2025.

"The national average price for a litre of diesel in July 2026 was €1.76, an increase of 6c on the same time last year. Petrol prices increased by 5c to €1.77 a litre. It should be noted that July prices were collected in mid-July and may not reflect more recent increases in the cost of diesel, petrol and home heating oil resulting from the ongoing situation in the Middle East."

Daragh Cassidy of Bonkers.ie said the rate holding steady was welcomed. "However, at 3.4%, inflation is still well above the 2% rate that's generally considered ideal.

"And since July 2021, prices in the economy have risen by almost 25% in total. So any price hikes are coming off a much higher base. So household budgets are still under pressure.

"Looking forward, the trajectory for inflation depends hugely on how the conflict between Iran and the US pans out. Energy prices remain highly volatile due to the war, and there is the potential for further gas and electricity price hikes later in the year, which could then feed through into wider inflation in the rest of the economy. 

"The impact from Europe's record-breaking summer on food and crop yields also remains a concern for grocery inflation over the coming months."

The CSO data shows overall insurance premiums increased last year, but this was largely attributed to the 9% jump in health insurance premiums.

"Car insurance premiums have now fallen for the tenth month in a row, with premiums down almost 4% versus last year," Mr Cassidy said. "And home insurance costs are down by 3% year-on-year too."

"And while this is obviously a good thing, it can lead to complacency as many policyholders who get their renewal quote over the coming weeks may wrongly assume they’re getting a good deal simply because their premium has stayed the same or increased only slightly. So my advice to any drivers or homeowners is to shop around, even if your quote looks competitive."