Insurance, petrol, mortgages lead inflation of 3.2%
Food costs are up almost 1% in the last year, while petrol prices have risen 13.8% and insurance costs a little more than 16%.
Other big increases are seen in the price of air travel which is up 27.3% in the year and mortgage interest is up 26.7%. Rail travel increased by 1.6% in the past month alone while rent prices were up 0.6% in April, according to the figures from the Central Statistics Office.
Inflation is now at the highest rate since October 2008. Last month alone prices rose 0.4%.
On the bright side the cost of going out in down with beer prices down 1.8%, nightclubs down 13% and restaurant costs 0.8% lower.
Also clothing costs are down 1.4% in the year while footwear prices fell 5.3%.
Although food costs rose in the year they were down 0.5% last month. Contributing to the annual jump were rises in fruit (8.6%), flour (14.1%), butter (10%) and milk (0.2%).
Health insurance has risen 22.3% in the last 12 months, while home insurance costs jumped 13.7%. Motor insurance also rose by 6.7%.
Goodbody analyst Juliet Tennent it is forces outside Ireland’s domestic control that are exerting an upward influence on the rate of inflation.
“Energy, mortgages and insurance are the major drivers with domestic sectors still dealing with deflation. Sectors exposed to the domestic sectors like restaurants and hotels and household goods are still seeing price declines.”
Electricity costs are up 6.4% in the year while gas prices are up almost 8%. Energy prices contributed one third to annual inflation, while mortgage interest accounted for about 40% of the increase and insurance for a further 20% of the increase.
Small business group ISME said that the rise in inflation is “deeply worrying” and confirms that businesses are suffering from exorbitant cost increases, which undermine competitiveness.
The association said that significant job losses would continue unless action is taken to address the costs that are under Government control.
Employers’ group IBEC said that although there have been some significant prices rises in the early months of 2011, inflationary pressures are likely to ease in the second half of the year. The group said the Government should focus on reducing costs across the economy and regaining competitiveness.
IBEC chief economist Fergal O’Brien said: “The Government's decision to cut the lower VAT rate by 4.5% on a selected basket of items will feed through to the consumer price index and about 10% of the index's overall basket of goods and services will benefit from this.
“This should therefore cut close to 0.5% off the CPI in a full year.”
Mr O’Brien said the CPI will increase by about 2.5% this year, adding that it is unlikely to exceed 1.5% next year.
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