Consumer prices continue to fall
The slump in consumer prices worsened in September as the cost of food and transport declined, government figures show.
Prices dropped 3pc from a year earlier after declining 2.4pc in August, the Central Statistics Office (CSO) said today on its website. Prices fell 0.4pc from August, when they rose 0.2pc.
Cheaper airfares led to a drop in transport prices as the economy remained in the grip of a recession forecast by the Government to persist until 2011.
Ryanair said last month it expects average fares to fall by about a fifth during the financial year.
“It is quite clear from these latest figures that the Irish economy remains deep in deflationary territory,” Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin, said in a note. “The last thing the economy needs at this juncture is to get caught in a deflationary spiral.”
Retailers Tesco and Marks & Spencer have cut prices at their Irish stores in a bid to prevent shoppers going to the North to take advantage of the pound’s decline against the euro.
Based on an Irish measure, which includes mortgage interest costs, prices fell 0.4pc in September from August and dropped 6.5pc from a year earlier.
Food prices fell 1.3pc and were down 6pc from a year earlier, today’s report showed. Transport costs declined by 0.9pc on the month and fell 4pc on the year.
- Louisa Fahy
© Bloomberg
