Transport and insurance buck falling cost of living

THE cost of living may be plummeting at the fastest rate since the Great Depression but figures reveal the cost of going out, using public transport and insuring your home and car continue to rise.

Central Statistics Office (CSO) figures – which reveal a 16% drop in rental prices and an 11.5% fall in petrol prices – indicate that inflation has fallen by more than 5% over the last year.

An escalating supermarket price war also meant food prices fell by 3.3% in the last year, with discounting at retailers accounting for a 12.4% and 12.2% drop in clothing and shoe prices respectively.

On a less positive note, however, the figures reveal that alcohol prices are up 2.7%, cigarettes are up 12.2%, cinema prices are up 0.8% and restaurant bills are up 1.8%.

While mortgage interest costs are down almost 50%, the prices soar by close to 25% for home insurance and 21% for health insurance

Besides the fall in the prices of petrol and diesel, the overall cost of running a car has increased due to hikes in motor tax, up 4.4%, and motor insurance, up 13.2%.

The report also highlighted the rising costs of public transport with bus prices having increased by almost 11% in the year. Taxi and rail fares are also up 8.2% and 9% respectively.

The figures mean Ireland is the eighth most expensive place for commuting in the world, according to the consultancy firm Mercer.

According to Davy Stockbrokers economist Rossa White, the figures suggest that prices in Ireland are plunging faster than anywhere in Europe and that Ireland is closing the gap with the rest of the eurozone.

Ulster Bank economist Lynsey Clemenger went on to predict that because mortgage rate reductions are largely over, the monthly price falls in the second half of this year would generally be of a smaller magnitude.

“However, base effects will see the annual rate of inflation... flirting with 6% by September and an average 4.2% for 2009 as a whole,” she said.

Business lobby groups have also demanded the Government use the falling cost of living to drive competitiveness in all sectors, not least for state and regulated services.

Meanwhile, falling prices have not stopped shoppers hunting for bargains.

The latest results from Primark, which trades as Penneys in Ireland, show a 21% rise in profits in the last few months.

Latest figures also show Ryanair carried a record number of passengers last month with figures increasing 13% to 5.8 million.