The costs of private rents charged by landlords have now swept past boom-time levels, motor insurance costs have continued to rise even as the prices of a host of other goods have fallen.
The CSO figures showed that the overall inflation measure of goods and services in the economy, the consumer price index, tumbled by 0.5% last month and fell 0.3% in the year to September.
That reflects the huge drop in world crude oil prices, which have halved in the past year, and led to the sharp falls in a range of goods and services, including transport and food.
However, the stresses in the economy, which is only now emerging very strongly from the country’s deepest ever crisis, are already evident, with the costs of private rents and insurance continuing to soar.
“All in all, there is a sense of déjà vu in the above, with a muted headline CPI once again masking significant moves within the different components of the index,” said Philip O’Sullivan, the chief economist at Investec Ireland.
After surging 1.2% last month, private rents are now 10.3% higher than in September last year, the CSO figures show.
Rents are also almost a third more expensive than the depth of the banking crisis in December 2011 and, significantly, are now higher than the boom-time levels reached right at the end of the boom years, in early 2008.
Local authority rents rose 0.7% last month but are 1% lower than a year earlier.
Meanwhile, the costs of mortgage interest payments continued to fall. Reflecting the long-delayed cuts in home loan rates by lenders, mortgage interest payments were pared by 0.6% in September and are now 8.6% below levels of a year earlier.
Following the sharp cuts in the European Central Bank and other banks’ funding costs mortgage interest costs are around a third lower the levels of December 2011.
The cost of motor car insurance premiums also showed significant gains. Motor car insurance rose by a further 2.6% in September and are now a remarkable 26.7% more expensive than a year earlier. Car premiums have now shot up by around 25% since December 2011.
“Industry commentary suggests that further increases are likely in the months ahead at least,” said Mr O’Sullivan.
In contrast, motor bike insurance costs are unchanged in the year and are only slightly higher than levels of almost four years ago.
Home insurance costs are 6.5% more expensive than a year earlier, but are still lower than December 2011.
Among the largest annual price falls are transport costs, which are down 5.5%, clothing and footwear prices, down 4%, and the prices of furnishings and household equipment which showed falls of 2.6%.
Nonetheless CSO sub-indices comparing prices now to almost four years ago are less flattering.
The costs of electricity and gas were flat last month but are still above levels recorded in December 2011 despite the sharp falls in crude oil in recent months.
Oil prices will be critical in determining the headline inflation outlook over the next twelve months or so,” said Alan McQuaid, chief economist at Merrion Capital.
“Oil is facing the heat on several fronts. Perhaps, the most important of them pertains to the mounting worries about China’s crude demand,” he said.
“In particular, the Asian giant’s currency devaluation has stoked speculation about soft economic growth in the world’s No 2 energy consumer.”
Mr O’Sullivan at Investec noted that services inflation is running an annual rate of 2.9%, while goods prices have fallen by 4.3%.
“The latest CPI release from the CSO reveals that prices were, on average, 0.3% lower in September compared to the same month of last year. Core [ex-mortgage interest] inflation is standing at only 0.2%,” he said.
“At first glance this is puzzling in light of an economy that is expanding at a blistering pace, but this primarily reflects imported deflation in a number of areas, which is more than offsetting higher prices elsewhere.”
© Irish Examiner Ltd. All rights reserved