Cost of living: Inflation hits 9.1% in June — highest rate in 38 years

The 2022 index has been published this morning by the Central Statistics Office, showing that prices have risen by the highest annual rate since 1984.

Staples like pasta and bread are rising in price while the humble potato is among the few items to decrease, according to the latest Consumer Price Index.

The 2022 index has been published this morning by the Central Statistics Office, showing that prices have risen by the highest annual rate since 1984.

According to the Consumer Price Index 2022, prices have risen by 9.1% in the year since June 2021. This is up from the 7.8% increase in the year up to the end of May this year.

The national average price for bread (large [800g] white sliced pan) was up 13.9 cents in the year to May 2022, while the same size brown sliced pan was up 16.1 cents in the year.

There has been an increase of 18.3c for 500g of spaghetti while the average price for 2.5kg of potatoes decreased by 19.3c.

The index noted that this is the highest increase since the second quarter of 1984, when inflation was at 9.7%.

The highest annual increase was in housing, water, electricity, gas and other fuel, with a rise of 22.5%, while transport rose by 20.4%.

The highest increase in the past month was in the area of transport, which was up by 5.1%, followed by food and non-alcoholic beverages, with an increase in that sector of 2.3%.

Housing, water, electricity, gas and other fuels have risen by 1.3% in the past month, while there was a similar increase in the restaurants and hotel sector.

According to the survey the largest decrease in prices was in the area of communications, with a fall of 1.4%.

Statistician with the CSO in the prices division, Anthony Dawson, said: “National Average Prices for selected CPI goods and services for May 2022 were also made available today by the CSO and show that diesel at €1.93 per litre and petrol at €1.86 per litre were up by 56.5c per litre (+41.4%) and 38.3cper litre (+26.0%) respectively between May 2021 and May 2022.” 

Mr Dawson added: “The national average price of a take-home 50cl can of lager at €2.16 was up 26c on average from May 2021 while a take-home 50cl can of cider at €2.44 was up 26.3c. In May 2022, the national average price of a pint of stout in licensed premises was €5.13 while a pint of lager was €5.52. As pubs were closed for the CPI collection period in May 2021, annual comparisons for the price of a pint are unavailable.” 

Rise in consumer spending

The increases in the consumer price index is echoed by a report issued by AIB this morning, which noted that consumer spending during the month of June rose 4% despite consumers making nearly 500,000 fewer transactions. This trend indicates that inflation is influencing Irish purchasing decisions, according to the report.

It highlighted that this trend was most noticeable in the food sectors, with the average transaction rising by 47c in pubs and off-licences, 45c in restaurants and 16 cents in grocery stores. There was an increase in spending in the sector, but there was a fall in number of transactions, in June.

Spending in the hotel sector increased by 11% in month-to-month spending, according to the report, with the average transaction in the sector rose from €85.87 to €90.16.” 

AIB Head of SME Banking, John Brennan, said: “During June, Consumers made fewer transactions, but those transactions were, on average, for larger amounts. This is an indicator that inflation is starting to impact Irish purchases and consumer behaviour. The food industry is particularly affected when it comes to changes in their supply chain costs, such as the price of petrol, fertiliser and feed for livestock.

“Overall consumer spending was up 4% in June, with digital wallet payments up 10%, showing how increasingly popular the cashless payment method is becoming with the public. They are now spending over €12m a day by tapping their phones and watches. This is equivalent to nearly one in every seven euro during the month being spent via a digital wallet.”