| 3.7°C Dublin

Cost of living edges up

The cost of living increased by half a per cent over the last year, official figures revealed today.

The biggest changes in goods and services were education up 9.5pc; housing, water, electricity and energy up 8.5pc; and communications up 2.9pc.

The Central Statistics Office (CSO) said the cost of alcohol, clothes and footwear and household furniture, equipment and maintenance all fell.

Consumer prices fell by just 0.1pc last month.

Business federation Ibec said inflation will be modest over the next few years.

Senior economist Fergal O'Brien said: "Crucially, however, the actual price level in the economy remains well below where it was prior to the crisis and it is likely to be 2013 before the Irish price level returns to where it was in summer 2008.

"Ireland must continue to use this window of opportunity to restore competitiveness."

Avine McNally, director of the Small Firms Association, said public utilities were still driving up overall costs.

"Irish small businesses have taken harsh steps to regain cost-competitiveness, but any gains are negated by the costs imposed by the Government-administered sector," she said.

Isme, the Irish Small and Medium Enterprises Association, said state costs are continuing to cripple companies.

Daily Digest Newsletter

Get ahead of the day with the morning headlines at 7.30am and Fionnán Sheahan's exclusive take on the day's news every afternoon, with our free daily newsletter.

This field is required

Chief executive Mark Fielding said: "It is vitally important that the root causes of the dramatic increases in production costs witnessed over the last number of years, including Government-controlled costs, are brought under control or else we run the risk of continuing to price ourselves out of the market.

"Serious action is needed to ensure that our current competitiveness trend is reversed so that we are in a position to compete when the world economy eventually rebounds, as it surely will."

Most Watched