CSO: Cost of living increases by 0.5%

THE cost of living rose by just over 0.5% in the last year, according to official figures.

Although consumer prices fell by 0.1% last month, the Central Statistics Office revealed they rose 0.6% in the last year.

The biggest change was a 9.2% increase in housing, gas, electricity and other fuel charges, while communications jumped 2.9% and goods and services were up 2.4%.

Clothes and footwear rose 1.9% in November, but were down by 5.5% on a year-on-year basis.

The latest consumer price index (CPI) shows that while November prices were marginally down from October levels (when a 0.7% year-on-year rise was recorded); they were up by 0.6% on a year-on-year level. The monthly annual inflation rate has been rising since August, which followed 19 months of declines.

Although up by 9.2% on November 2009, utility costs were actually down by 0.2% on a month-by-month basis. Alcohol and tobacco prices were down by 1% on the preceding month, and down by as much as 3.3% when measured on an annual basis.

Food prices fell in November by 0.2% on a monthly basis and by 0.8% on an annualised level.

The Small Firms Association (SFA) said inflation is being driven by increases in public utility costs such as housing, water and electricity.

SFA acting director Avine McNally said: “These figures again show that costs in some sectors are too high and we need urgently to come in line with our competitors.

“Costs measures taken by Irish small businesses to regain costs have been negated by the costs imposed by the Government-administered sector — while the Government has indicated that action will be taken to address costs, we have as yet not seen concrete proposals.

“Unless costs are urgently addressed, jobs will remain under threat or lost, and businesses will close.”

The Irish Small and Medium Enterprises Association (ISME) said companies continue to be undermined by cost increases in local charges, energy and transport.

ISME chief Mark Fielding said: “Company owners are being constantly faced with more and more state-imposed cost increases. This was evident in the recent budget, which increased transport and employment costs and failed to address the serious issue of local charges.

“Somebody in authority has to realise that the only way for business to survive and grow is to be competitive, the biggest obstacle to this at present being the state.”

According to Alan McQuaid of Bloxham Stockbrokers, price pressures are set to remain “fairly subdued” over the next 12 months.

“The increase in excise duties on petrol and diesel, in Tuesday’s budget, will add to the CPI in 2011. The main upward pressure on the Irish CPI in the months ahead will come from mortgage interest rates and food/energy costs. “We’re now expecting headline prices to be up by 1% on average next year as against a fall in prices of 1% in 2010, and the record post-war contraction of 4.5% in 2009,” he added.

Mr McQuaid warned that the threat of deflation hasn’t totally gone away.

“Policymakers around the world need to remain on their toes. A rebound in some commodity prices and stabilisation of core inflation rates suggest that the immediate risk of deflation has diminished, but it remains a real threat in just about every major economy,” he added.


Lifestyle

Frits Potgieter is General Manager with Muckross Park Hotel and Spa.You've Been Served: Frits Potgieter, Muckross Park Hotel and Spa

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