Increased fuel costs and airfares push consumer prices higher

Consumer prices rose by 0.7 per cent in the year to the end of March, new figures from the Central Statistics Office (CSO) show.

The most notable changes during the period were rises in transport, restaurants and hotels, health costs, and miscellaneous goods and services.

Transport costs were 5.3 per cent higher versus the same month in 2016 due to higher fuel costs and an increase in airfares. Diesel had the most positive effect on the transport division, increasing by 18.7 per cent on the year. The overall sector increase was partially offset by a reduction in the price of motor cars.

Meanwhile, prices of motor insurance saw a marginal increase in the last 12 months – up 0.7 per cent.

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Restaurant and hotel costs – which include alcohol consumed on or within a licensed premise – increased 2.2 per cent since March last year on the back of a rise in food and drink costs as well as an increase in the cost of hotel accommodation.

Wine, which falls into two categories, had an interesting 12 months in that it decreased by 9.3 per cent in the alcoholic beverages and tobacco category, but increased by 1.4 per cent in the restaurants and hotels category.

The former category includes alcoholic beverages purchased in off-licences and supermarkets but excludes alcohol consumed on or within licensed premises.

Lower prices

Food and non-alcoholic beverages also declined in March this year compared to the same period last year. The drop of 2.6 per cent is due to lower prices across a range of products such as jam, honey, milk, cheese and eggs. The most significant decrease in this category was seen by chocolate, pizza and quiche, which saw prices fall over 12 per cent in the last 12 months.

During the same period, there was a 4.5 per cent decline in the cost of furnishings and household equipment costs, and a 3.8 per cent rise in clothing and footwear prices. The former declined as the price of furniture and non-durable household goods went down.

Consumer prices were up 0.6 per cent versus March 2016 with the biggest increases recorded in transport and clothing and footwear. There were notable monthly decreases in costs of alcoholic beverages, tobacco, housing and utility costs.

Commenting on the latest data, Merrion Capital’s chief executive Alan McQuaid said the figures show overall inflationary pressures are still well contained despite the rise in the annual rate.

“Based on the figures for the first three months of the year, it now looks like the average for 2017 will be somewhere between 0.5 per cent and 1 per cent. Although higher energy costs will play a part, the services sector will be the main source of upward pressure,” he said.

The consumer price index is compiled by a collection of roughly 51,000 prices on a monthly basis which creates a representative basket.