Consumer prices continued to rise in August despite a dip in the annual inflation rate to 4.8 per cent last month from 5 per cent in July, a drop which brought the annual rate to a six-month low.
New figures from the Central Statistics Office (CSO) show that the highest annual increases were for housing; water; and electricity, gas and other fuel prices, which rose by 21.8 per cent. The price of alcohol and tobacco rose 5.6 per cent and prices in the education sector rose 4.6 per cent.
Economists warned consumers that lower gas prices next month and a reduction in electricity tariffs in November will be "cancelled out" by motor fuel costs. "Petrol prices have spiked over the last three weeks," said Rossa White, of Davy Stockbrokers. He contrasted the annual movement in the consumer price index with a larger drop in the standard euro-zone measure of Irish inflation - the EU harmonised index of consumer prices.
This measure, which does not include mortgage interest fees, decreased from 2.7 per cent to 2.3 per cent, its lowest level for 10 months. "That gap highlights the point that European Central Bank rate increases have caused much of the rise in broader inflation this year," Mr White said.
Fine Gael spokesman Richard Bruton TD said the figures showed that price rises in the services sector, much of them in areas dominated by the Government, were surging ahead of inflation in the goods sector.
Annual services inflation was 8.5 per cent, while goods inflation was 0.2 per cent. "Over half of a typical family's spending now goes on services. Prices in Government-regulated sectors and Government regulation of private service providers are clearly not adequate," Mr Bruton said.
With the rate of monthly price increases on the rise to 0.5 per cent in August from 0.3 per cent in July, the highest increases were in the price of clothing and footwear, which rose by 5 per cent after the summer sales
"The main surprise was the limited recovery in prices after the summer sales," said Ulster Bank economist Pat McArdle. There was no sign of a spending spree due to the unlocking of the SSIA scheme, he added.
