Rate of inflation falls in January

The annual rate of inflation fell to 2.2% in January from 2.5% the previous month, the Central Statistics Office (CSO) said today.

Consumer prices in the month decreased by 0.5%, compared to a fall of 0.2% recorded in January of last year.

The biggest increases in the year were in the cost of education, up by 8.9%, with Housing and Energy costs up 6.7%.

There were slight drops in Household costs of 1.9% and in Clothing and Footwear, which fell by 1.1%.

Housing, Water, Electricity, Gas & Other Fuels fell due to lower mortgage interest repayments, while Transport rose due to increases in petrol and diesel prices and motor taxation.

Responding to the figures the Irish Small & Medium Enterprises association (ISME) warned that “government-sponsored cost increases” have a devastating effect on small businesses and threaten to stymie any recovery.

“Cost competitiveness remains a serious issue for SMEs as the level of cost increases impacting on businesses have consistently eclipsed the rate of inflation,” said ISME Chief Executive Mark Fielding.

“The inexorable rise in Government controlled costs, particularly in the areas of energy, waste, transport, utilities and local charges must be curtailed as part of any ‘Jobs initiative’.”

Meanwhile, this year the CSO has shifted how it calculates consumer spending with changes to what it includes in a basket of goods and services, to reflect changes in consumer habits.

Some 27 new items have been introduced and 26 have been deleted.

Among the additions to the list are Building Energy Rating (BER) assessment fees; pregnancy test kits; bundled telephone & internet services; smart TVs; MP4 docking stations; music downloads and media tablets.

Meanwhile cut from the basket are DVD players; ladies slippers; CD singles and cauliflower, among other items.