Consumer prices rose by 9.1% in the year to July, the same level of inflation as in June, the latest Central Statistics Office figures show today. This marked the first time since the start of the year that price growth has not accelerated on a year-on-year basis, the CSO figures show.
Inflation is standing at a 38-year high. The CSO said that prices were 0.4% higher month-on-month, which was also the slowest level of growth since January. That was down on the 1.3% registered in June and well below the 1.9% recorded in March.
Today’s CSO figures show that July saw higher rents and mortgage interest repayments as well as an increase in the cost of home heating oil, electricity, gas and solid fuels. Transport costs also increased by 19.4% mainly due to a rise in prices for diesel, petrol, cars and air fares, but this increase was partially offset by lower prices for passenger transport by bus, coach and train.
Prices for food and non-alcoholic drinks rose by 7.7% last month with increases in the prices of meat, bread, cereals and milk, and cheese and eggs. Hotel prices took a 7.3% leap last month and are 22% higher than last year. But July saw decreases in the price of motor and health insurance as well as lower education costs.
On a monthly basis, petrol prices also fell by 3% in July and diesel fell by 1.1% while the traditional summer sales saw clothing and footwear prices fall by 5%. The CSO said today that prices for electricity were up 40% on an annual basis, while gas prices rose by 56.6%, home heating oil jumped by 91.9% and solid fuels were up 31.8%.
Meanwhile, the cost of diesel soared by 44.8%, while petrol prices increased by 35.4%, and the price of cars increased by 11.5%. Airfares were also 47.8% more expensive last month compared to the same time last year.
The harmonised measure, used to compare us to other EU countries, stood at 9.6% in July which was also the same figure recorded in June. The Central Bank forecast last month that price growth would probably peak above 10% by September before gradually declining to average 7.8% for the year. It said it sees prices growing by a further 4.2% next year and by 2.1% in 2024.
Anthony Dawson, Statistician at the CSO, said that prices have been rising on an annual basis since April 2021, with an annual inflation of 5% or more recorded each month since October 2021.
Too soon to say if inflation has peaked
Tánaiste Leo Varadkar said inflation is racing ahead but it is far too soon to say if it has peaked. Speaking in Co Roscommon, he said: “We want to see inflation under control and prices stabilising again and that requires a comprehensive inflation strategy and international level actions.”
Mr Varadkar said the Government was working on a package of measures to “relieve the burden on people” and that would be announced in the Budget. He said it would be “combination of things”, but nothing has been decided or agreed.
Mr Varadkar said people will see the first results of that in their pockets “within weeks”. Addressing rising energy costs, the Tánaiste said he would not to speculate on whether there would be further assistance confirmed next month, but he said they are looking at all options.
On the speculation about the introduction of a 30% tax rate, he said any approach to taxation must be universal “where we can help everyone because everyone is feeling the squeeze, and then more targeted measures for those who need it most”.
He added that a windfall tax on profits of energy firms should be considered, but if its a tax on the regular or expected profits then there is the risk of tipping companies away from investing in the grid and renewable energy.
He said that would be a short-term fix that would create a long-term problem.