Property prices send inflation back up to 5%

Pressure on consumers from the rising cost of living showed no sign of abating last month with inflation increasing slightly to bring it back to 5% for the year.

The main culprits for the July rise were property prices and household bills, which shot up 2.6% while transport rose by 1.1%.

According to the Central Statistics Office’s latest Consumer Price Index inflation went up by 0.3% last month, the same increase it recorded this time last year.

Worryingly the rate of inflation has doubled since December 2005.

This year property, mortgages and household bills have seen a combined and alarming 21% increase, drink has gone up 5.6% while school and college costs jumped by 4.5%.

Fine Gael deputy leader Richard Bruton said homeowners were feeling the strain.

“The Fianna Fáil Government’s response, in particular for first-time buyers, has been pathetic,” he said.

“A further interest rate increase has been signalled by the European Central Bank, and it is time the FF Government responded to the pressures that families are facing.”

Mr Bruton also said most of the sharp increases were in areas the Government exercised control over such as housing, health and communications.

Inflation has been hovering around the 5% mark all year with a four year high of 5.2% in January followed by a low the next month of 4.8%.

The last time such levels were recorded was February 2003 when tax rises and public sector charges helped drive up the cost of living.