Annual inflation - High rates are pulling a pinch

WHILE the slight fall in the annual rate of inflation, down to 4.9% in June from 5% in May, is a welcome development, Ireland is still out of kilter with other EU states.

Against a backdrop of rising wage demands, the EU’s harmonised index shows inflation here reached 2.8% in June from 2.7%, the second highest rate in the eurozone and well above the average of 1.9%.

Ominously, production fell in the technology and chemicals sector, down 9.3% on May last year. And tourism was hit by higher air fares, plus rising petrol prices, and increased prices in restaurants and hotels.

Nor is the downward inflationary trend any consolation to homeowners as mortgage interest repayments continue to rise.

Over the past 12 months, according to the CSO, mortgage interest costs have gone up by a huge 46%. Set to go on rising, the hair shirt remains in vogue.