Consumer prices up on back of rising cost of alcohol

Consumer prices rose by 0.3 per cent in the twelve months to November 2013 the Central Statistics Office (CSO) said today, reflecting an increase in alcohol prices. However in the month of November, the Consumer Price Index fell by 0.2 per cent.

On an annual basis, the greatest price increases were found in alcoholic beverages & tobacco (+6.2%); education (+4.5%); and restaurants & hotels (+3.1%), with higher prices for alcohol, both consumed in licenced premises and sold in off licences and supermarkts, pushing prices higher.

The miscellaneous goods & services category was also up during the year, mainly due to higher health insurance premiums, while education rose due to an increase in third level education costs.

Falling prices were found inthe clothing and footwear sector (-4.6%); furnishings, household equipment & routine household maintenance (-4.2%), communications (-3.1%) and transport (-1.7%).

In the month of November prices rose again in the restaurants & hotels sector (+0.6%) and alcoholic beverages & tobacco (+0.4%).

The sectors which fell the most during the month were transport (-0.20%), which decreased on the back of a decrease in petrol and diesel prices and lower airfares; and food & non-alcoholic beverages (-0.04%), which fell due to price decreases across a wide range of products.

Alan McQuaid, economist with Merrion Capital, says that domestic inflationary pressures are likely to remain depressed “for some time to come”.

“Subdued consumer demand will in general continue to put downward pressure on prices in the months ahead. The residential property tax has hit disposable incomes hard, which in turn is weighing negatively on spending power. And it should be remembered that the full-year effect of the property tax has yet to be felt,” he said.