Poorer households experiencing significantly higher inflation, CSO study finds

Poorer households in the State are experiencing significantly higher rates of inflation than more well-off ones, new research by the Central Statistics Office (CSO) shows.

While headline inflation in the Republic was recorded at 8.2 per cent in September, households with the lowest income experienced a rate of 9 per cent while those in the highest income decile had estimated inflation of 7.5 per cent, the agency said.

Poorer people tend to be more exposed to general price growth as they have to spend a greater proportion of their income on necessities such as energy, food and transport.

While noting that each household has a unique consumption pattern, the CSO’s study combined the latest consumer price figures with more detailed expenditure data to get an estimate of the inflation rate facing different income groups.

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The study found that households paying a mortgage had estimated annual inflation of 7.8 per cent while for households that own their home outright, inflation was estimated to be 8.4 per cent. Similarly households that rent their home from a private owner had an estimated inflation rate of 8.3 per cent, compared with 9.1 per cent for those renting from a local authority.

The CSO also noted that while inflation was 8.2 per cent in September, it was 8.1 per cent for urban households and 8.7 per cent for rural households, reflecting the increased transport costs for those living in rural Ireland.

The agency’s research also indicated households where the household reference person was aged under 35 and households where the reference person was aged 35 to 64 years had estimated inflation rates of 8 per cent, while annual inflation was estimated to be 9 per cent where the reference person was aged 65 or over.

Higher-than-average inflation was also calculated for households of one adult, one adult with children, and two adults without children.

Headline inflation in the Irish economy accelerated to 9.2 per cent in October from 8.2 per cent a month earlier, intensifying the squeeze on households.

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