Ireland's deflation bucking the trend in OECD
Published 01/12/2010 | 05:00
IRELAND was the only one of 23 countries still experiencing deflation in October, latest figures from the OECD show.
Prices rose sharply in Japan, giving it the first annual inflation for 20 months.
This left Ireland on its own, with a 0.8pc drop in prices compared with October last year, as measured on a harmonised scale between countries.
Inflation is picking up across the OECD. It reached 1.9pc in October from 1.7pc the previous month.
Inflation also stood at 1.9pc in the euro area, which brought it in line with the target of the European Central Bank (ECB).
This level of inflation is strengthening the case for the ECB to ease back on its cheap loans to banks -- a prospect that puts further pressure on the Irish banks.
Energy and food prices helped drive the pick-up in inflation, although there were wide variations.
Energy prices rose by 6.6pc annually in October, compared with 5.2pc growth seen in September.
Irish energy prices, however, rose 10.8pc. This was dwarfed by a 26pc hike in Greek energy costs, but that was well ahead of the 8.5pc average increase in the euro area.
Figures from the EU yesterday showed Irish household electricity costs at €18.04 per 100 kWh, compared with an EU average of €16.75.
Food prices were up 2.6pc versus 2.3pc to September. Irish food prices were 1.4pc lower and contrasted dramatically with the 4.5pc increase in the UK -- the biggest increase recorded in the EU's 15 richer states.
Excluding food and energy, Irish prices were unchanged over the year, while they rose 1.1pc across the countries surveyed.