Business Irish

Tuesday 21 November 2017

Cost of living falls, but hotels and airfares on the rise

Aideen Sheehan Consumer Correspondent

HOTEL prices rose by nearly 5pc last month, despite industry claims to offer some of the cheapest rooms in Europe.

New Central Statistics Office figures show annual inflation has stabilised at 2.7pc -- in line with the rest of the eurozone and down from a 30-month high of 3.2pc in April.

While the cost of living actually fell 0.1pc in June compared to May, there were some notable exceptions, with hotel costs up 4.7pc, airfares up 17.9pc and mortgage costs rising by 1.8pc.

The Irish Hotels Federation said the increase in prices in June reflected the usual seasonal fluctuation coming into the peak summer period, and it was more significant that hotel prices were unchanged compared to the same month last year, and 13pc lower than they were in the Celtic Tiger era.

Motorists got some relief as petrol and diesel prices eased back by close to 2pc, though filling up still costs 14pc more than a year ago.

The summer sales saw the price of clothes and shoes fall by 5pc last month, while furniture is now nearly 7pc cheaper than a year ago.

Food and beverage prices bucked international trends by falling slightly last month and they are up just 0.7pc in the last year -- although a National Consumer Agency survey found branded groceries are up 5pc.

While some items such as flour, sugar and cocoa rose in line with global price increases, weak consumer demand appears to be keeping a lid on upward pressure.

IBEC economist Fergal O'Brien predicted Irish inflation would fall back to 2pc during the second half of the year, as almost all upward price pressure was coming from mortgage rates and energy prices.

The Irish Small and Medium Enterprises Association (ISME) warned increased energy costs announced this week could be the final straw for many hard-pressed businesses.

Irish Independent

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