Thursday 22 August 2019

Inflation rises to six-year high

Stock photo: PA
Stock photo: PA
Charlie Weston

Charlie Weston

INFLATION has hit its highest level in six years.

Overall prices climbed by 1.1pc in March, with higher transport and hotel accommodation costs and rents behind the rise.

The March figure compares with inflation of 0.6pc in February, according to the Central Statistics Office.

March marks the first time the annual inflation rate has gone over 1pc in six years.

Economists said price rises last month were stronger than expected, but they stressed that overall inflationary pressure in the economy remains fairly-muted.

The chief monthly changes in March were increases in the cost of air fares, petrol, diesel, alcohol, motor cars and hotel accommodation.

But there were decreases in the price of household goods when compared with February, according to the latest consumer price index figures from the CSO.

Over the last year prices of food, non-alcohol drinks and cigarettes have all risen. Price rises were also recorded for electricity, gas and home-hearting oil. A large number of energy providers have raised their prices in the last few months.

Private rents were 5.6pc higher in the years, according to the consumer price index.

Petrol and diesel prices continue to rise on an annual basis. Also up on an annual basis is the cost of newspapers.

Motor insurance costs are down almost 6pc in the year, according to the CSO.

However, many motorists are getting renewal notices which are higher than last year. Insurance experts said they need to challenge these and seek out additional quotes.

The hospitality sector saw a 3.6pc increase in prices, due mainly to higher costs for alcohol.

Economist at stockbroker Cantor Fitzgerald Ireland Alan McQuaid said: “With the economy continuing to grow strongly, the more immediate worry on the domestic inflation front centres around increased wage demands, particularly in the public service. “

He added that as the labour market approaches full employment levels, wage growth will pick up.

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