Increased fuel costs see inflation rise to 0.5%
According to the latest consumer price index (CPI), inflation has risen to its highest level in almost four years due to rising fuel costs and a pick-up in hotel and restaurant prices. It also suggests that the average basket of goods and services in the Republic was 0.5% higher in February than 12 months previously. Apart from July last year, the last time the annual inflation rate hit 0.5% was 2013.
The biggest change in the year was a 3.6% increase in transport costs. Within this, the figures show the price of diesel has risen by 20% in 12 months while the price of petrol is up 13. 3%. There were also increases in restaurants and hotels (2.1%) and miscellaneous goods and services, including motor insurance, which also rose 2.1%.
The annual rise in motor car insurance was 4.6% in February, down from 6.3% in January, 8.8% in December and 11.7% in November. There were also decreases in household furnishings (-5.2%), clothing and footwear (-3.8%); food and non-alcoholic beverages (-2.6%); and clothing and footwear (-2.5%).
Commenting on the figures, Merrion analyst Alan McQuaid said: “Despite the robust Irish economy, inflationary pressures as measured by the headline CPI should in our view remain fairly well contained in the immediate future.”
“Oil prices will be critical in determining the headline inflation outlook over the next 12 months or so, but they remain volatile and hard to predict given the uncertainty over potential Opec output cuts,” Mr McQuaid said.
