Cost of living rises despite inflation fall
Ireland’s annual inflation rate slipped to below 5% last month but the cost of living remains high, new figures released today reveal.
Living costs rose again with air fares and petrol prices pushing transport costs up by 0.8%.
It comes after Central Bank head John Hurley yesterday warned against employers granting pay hikes in a bid to off-set inflation.
The 0.1% drop has been welcomed by business chiefs but Labour’s consumer affairs spokeswoman Kathleen Lynch said the minimal decrease provides little comfort for mortgage holders.
Meanwhile separate figures reveal industrial production in May dropped by 6.15% compared with the same month last year.
“Today’s figures from the CSO highlights inflation is a major problem for the economy with households facing a significant diminution of their living standards with prices rising by 5% annually,” Labour’s Kathleen Lynch said.
“Inflation rates in Ireland remain well ahead of the European average and effectively wipe out any wage increase benefits from the social partnership payments.
“The drop from 5% to 4.9% will provide scant consolation to home owners particularly the first time buyers with 100% mortgages.
“The Government has indicated that it is willing to move on mortgage relief.
“Rather than waiting for the Budget the Government should do this sooner rather than later. Families need relief now,” she said.
Prices rose by 0.2% compared with May.
Clothing and footwear prices dropped by 1.7%, but higher air fares and petrol prices pushed transport costs up by 0.8%.
Restaurant and hotel prices were also higher, while a hike in mortgage repayments continued to raise prices in the housing sector.
Mortgage interest costs have jumped by almost 50% in the space of a year.
Separate CSO figures reveal industrial production in May dropped by 6.15% compared with the same month last year.
Commenting on the figures the Irish Business Employers Confederation (IBEC) Chief David Croughan said: “Despite this fall in May, output in the first five months of the year was solid, growing by an annual 7.7%.
“It is encouraging to see the non-modern sectors of the economy, which had grown by 4.7% up to May, enjoying their best performance since 2000.
“The weakness in the modern sector is largely confined to the chemicals industry, the output of which tends to vary.”
