Saturday 20 January 2018

Inflation unchanged despite hike in costs of alcohol

Charlie Weston Personal Finance Editor

THE price of beer, wine and spirits all increased in May, new figures from the Central Statistics Office show.

A reduction in the number of special offers in supermarkets and off-licences was blamed by statisticians for the spike in the cost of booze.

The increases occurred despite strong competition among retailers on sales of alcohol ahead of the Euro 2012 football tournament. Tobacco prices also went up last month.

Over the past year, the cost of alcohol and tobacco has risen by 4.2pc.

Spending on alcohol averages around €40 a week per household, figures out earlier in the year from the CSO showed.

Despite the rise in alcohol prices, the inflation rate was unchanged from the previous month with an annual rise in prices of 1.8pc, the CSO said.

A steep rise in the cost of education and a spike in the price of transport meant that prices rose in the past year.

But there was some relief for drivers as the cost of petrol and diesel fell after surging for months.

Petrol and diesel both fell by 1.2pc in the month, but domestic gas and bottled gas prices rose along with electricity.

Energy

The cost of energy for the home has shot up by 11pc in the last year, due to higher gas, electricity and solid fuel prices.

The average weekly expenditure on food is €131 per household, but yesterday's inflation figures show food prices had remained steady in the last year.

Moves by Permanent TSB to cut its variable rate, and cuts in the European Central Bank in November and December, helped the cost of repaying a mortgage fall by almost 5pc in the past year.

Just a few months ago, mortgage interest was rising by 20pc a year.

There could be further good news for homeowners next month if the European Central Bank goes ahead with a cut in its key interest rate by 0.25pc as economists now expect.

Drugs prices rose slightly in May, but that could be about to change after pharmacy chains Boots and Sam McCauley said they would reduce the prices of some prescription drugs. However, Boots is also increasing the price of some medicines.

The CSO figures also show that the prices of hygiene products, cosmetics and skincare products fell in May.

Private rents fell by 0.1pc in the month of May -- the second monthly decline this year and the first time since before 2010 that there have been two consecutive monthly declines.

Irish Independent

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