Wednesday 16 January 2019

Rise in potato prices from summer drought contributed to higher consumer costs last month

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Charlie Weston

Charlie Weston

HIGHER prices for potatoes due to the summer drought and energy price rises contributed to higher costs for consumers last month.

Consumer prices rose by 0.6pc in the year to November, as rents continued to go up and the price of home heating and electricity increased.

Figures from the Central Statistics Office (CSO) show that domestic gas price rises also contributed to the inflation rate.

Potato prices rose 14.2pc due to the lack of rain during the summer, with retailers forced to import the traditional stable of the domestic diet.

The rise in excise duty on cigarettes meant that category of the consumer price index was up almost 7pc.

The Budget saw the price of 20 cigarettes rise by 50c to €12.70 due to an increase in the duty on them.

Restaurants and hotels saw their average prices climb, pushed up by higher alcohol prices, while education prices edged up 1.7pc.

Home-heating oil was 17pc dearer than last year, the CSO said.

There were also price falls, with furnishings and household equipment costs dropping by 4.1pc.

Motor insurance premium rates were down by 7.6pc in the year.

However, many drivers report being sent renewal notices which are higher than they paid the previous year.

Insurance experts said drivers need to challenge renewal quotes by shopping around, as loyalty is often punished, rather than rewarded, by insurers.

The insurance industry was rocked this month by the collapse of Danish insurer Qudos, which  had 50,000 customers in this country.

Despite that, the cost of cover is falling. Managing director of InsureMyCars.ie Jonathan Hehir said he expects premium rates to decrease again next year.

He said this was due to insurers being more active tackling fraudulent claims, and judges throwing out more suspect cases.

It was also due to “a more discerning savvy price-conscious consumer who is willing to shop around for the best value,” he said.

The CSO price index figures also show that the price of food and non-alcoholic drinks fell 2pc over the year, with the cost of meat, bread and cereals, sugar jam and chocolate all declining .

On a monthly basis, prices fell 0.5pc in November. This compares with a fall of 0.1pc in prices in October.

The cost of clothing and footwear increased slightly as prices recovered from sales, and health costs were up marginally in the month.

Alan McQuaid of stockbroker Cantor Fitzgerald said oil prices will be critical in determining the headline inflation outlook over the next twelve months.

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