Inflation exceeds 10% for lower-income households

Lower-income households experienced inflation of as much as 10.3 per cent in consumer prices in the year to June, compared to a rate of 8.2 per cent for the highest-income households.

An update from the Central Statistics Office (CSO) shows that households with the lowest incomes continue to be hardest-hit by the surge in consumer prices, while rural households, single-person households and renters were also found to be enduring the sharp end of soaring living costs.

Households in the lowest decile – or the bottom 10 per cent by income – saw prices rise 10 per cent in this period, while prices for those in the second-lowest decile increased 10.3 per cent.

The CSO said earlier this month that its consumer price index (CPI) rose 9.1 per cent in the year to June.

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But its further analysis released on Wednesday quantifies the extent to which those on lower incomes have been more severely affected by the rising price of essential expenses such as food, energy and transport, which represent a bigger share of their total outgoings.

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Steep increases in energy bills have been one of the main drivers of inflation over the past year.

Households that rent their home from a private owner had an estimated inflation rate of 9.4 per cent in June, while the rate for households renting from a local authority was 9.9 per cent.

Households paying a mortgage experienced annual inflation of 8.4 per cent, while for households that own their home outright, inflation was estimated to be 9.3 per cent.

This gap may shortly close as mortgage payments are now rising, following lenders’ moves to pass on the European Central Bank’s interest rate increase.

For urban households, annual inflation was running at 8.8 per cent in June, but for rural households, it was 9.7 per cent, with swelling transport and energy costs taking a bigger toll.

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Higher-than-average inflation was also calculated for households with one adult (10.2 per cent), one adult with children (9.8 per cent) and two adults without children (9.2 per cent).

Households where the “reference person” for the purpose of the CSO’s study was aged under 35 experienced inflation of 8.8 per cent, the statistics body estimates, while inflation was placed at 9.8 per cent for households where the reference person was 65-plus.

Over the five years to June 2022, the lowest-income decile experienced consumer prices increases of 13.9 per cent, compared to a 10.6 per cent increase for the highest-income decile, the CSO also said. The overall rate of inflation over this time was 12 per cent.

Eurostat, the European Union’s statistics office, will on Friday publish its flash estimate for euro zone inflation in July.