Inflation surges again as utility bills soar

Irish inflation accelerated to 9.2 per cent in October from 8.2 per cent a month earlier, the Central Statistics Office (CSO) said on Thursday, as the squeeze on household and business budgets continues.

The rise came after two consecutive months of moderation in the annual rate of consumer price increases.

Prices have risen by at least 5 per cent for 13 consecutive months, with soaring housing, water, electricity and gas prices – up 27.8 per cent in the year to the end of October – driving the worst cost-of-living crisis in a generation.

The latest consumer price index (CPI) shows prices also increased 1.6 per cent in the month of October from September, with higher utilities and fuel costs chiefly to blame. That was the second-highest monthly jump in consumer prices this year, the CSO said.

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Prices in the housing, water, gas, electricity and other fuels category rose 8.7 per cent in the month.

Within that category, electricity prices were up 71.2 per cent on an annual basis, gas prices jumped 93.3 per cent and the price of home heating oil rose by 65.4 per cent. In October, solid fuels were 47 per cent more expensive than they were a year earlier.

Rents paid to private landlords, meanwhile, jumped 11.1 per cent in the year to the end of October.

After utility and fuel prices, food and non-alcoholic beverages registered the second-largest annual increase in prices by product category, jumping 10.1 per cent. With farmers in the energy-intensive dairy sector grappling with sharp increases in electricity bills, dairy product prices have soared since late 2021.

The cost of full-fat milk increased 25.4 per cent since October 2021, a 42c jump for a two-litre bottle, the CSO said. The average price of Irish cheddar per kilogram rose by €1.28 and butter per pound rose 60 cent.

Margarine and other vegetable fat prices have soared more than 35 per cent in the past 12 months, driven higher by commodity price increases in the wake of Russia’s invasion of Ukraine, a major food and grain producer.

Bread (up 16 per cent) and flour prices (up 14 per cent) have risen with crucial global grain exports from Ukraine impacted throughout the year by the war.

Soaring prices could drag the economy into a technical recession – defined as two consecutive quarters of economic contraction – in the coming quarters, the Central Bank warned in its latest quarterly economic bulletin last month, as households and businesses struggle to keep pace with inflation.

The Government now expects inflation to peak at 10.4 per cent in the final months of the year before beginning to moderate in early 2023.