Inflation just 0.2pc as clothing prices fall
THE cost of living is up just 0.2pc in the past year as the latest inflation figures show falls in the price of clothes, furniture and transport during January,
Central Statistics Office (CSO) figures show that the winter sales helped push prices down by 0.5pc in January, and the annual inflation rate remained at a very steady 0.2pc.
Clothing and footwear prices fell by 9.5pc in the month, while lower petrol, diesel and car prices helped push transport costs down by 2.1pc.
Meanwhile, alcohol and tobacco prices rose by 3.9pc last month mainly due to double-digit increases for spirits in the post-Christmas period.
Homeowners have seen a welcome drop of more than 10pc in mortgage interest repayments in the past year, though those renting saw a 9pc rise.
Consumers have been hit with a 7.5pc increase in health insurance costs in the past year, and premiums are up more than 27pc in the past two years, CSO figures show.
On the plus side, however, home insurance costs are down 2.1pc, while car insurance prices are almost unchanged.
But education costs have soared by 4.6pc and are up nearly 10pc in two years.
Merrion stockbrokers' Alan McQuaid said subdued consumer demand would continue to put downward pressure on prices in the months ahead.
"The residential property tax has hit disposable incomes hard which, in turn, is weighing negatively on spending power. And it should be remembered that the full-year effect of the property tax will be felt in 2014.
"However, we do expect an uptick later in the year, with a strengthening labour market likely prompting a gradual rise in wages," he said.
Davy stockbrokers said the subdued inflation rate was a poor indicator of the Irish economy's improved health.