Inflation lowest in two years due to oil prices
Published 14/12/2012 | 05:00
THE cost of living has fallen for the third month in a row, pushing inflation to its lowest level in two years.
Fuel price drops for motorists helped reduce the cost of living by 0.4pc in November.
Costs fell by 3.7pc for petrol and 1.8pc for diesel and, along with a fall in airfares, this led to an inflation drop for the month.
Mortgage interest prices rose slightly in the month for those on variable rates, however, the latest Consumer Price Index shows.
Prices overall have risen by 0.8pc in the last year which means the annual inflation rate is the lowest it's been in two years – in 2011 it was 2.6pc.
Food prices rose by 0.7pc in the last 12 months, but there's been significant increases for potatoes, breakfast cereals, soft drinks and fruit juice.
The cost of smoking also rose by 7pc in the last year.
Education costs rose by 4.7pc, driven mainly by higher third level student contribution fees, the new Central Statistics Office figures show.
And though general health costs are almost unchanged, the price of private health insurance is up 16pc in the last year.
Disposable incomes will be hit hard by the budget, keeping inflationary pressures low next year, said Alan McQuaid of Merrion Capital.
The main risk to inflation would be from outside Ireland such as energy prices, he said.
The Irish Small and Medium Enterprises Association called for a pay freeze for at least a year to help the country become more competitive.
Using another EU measure that excludes mortgage interest, Irish inflation is 2.1pc, which is below the EU average of 2.5pc and the 2.7pc seen in the UK.