Annual Inflation Rate in Ireland Rises to 4.9% in August, Core Inflation Remains High
New flash estimates from the Central Statistics Office (CSO) reveal that the annual rate of inflation in Ireland increased to 4.9% in August. According to the EU Harmonised Index of Consumer Prices (HICP) flash estimate, prices in Ireland rose by 4.9% in the year to August and by 0.5% compared to July.
This marks an increase from the 4.6% recorded in July, with food prices seeing a significant rise of 7.7% in the year to August. Energy prices also increased by 3.4%. However, this upward trend in energy prices is expected to continue as an excise duty cut is set to expire at the beginning of September.
The expiration of the excise duty cut will result in a 7 cent increase in fuel prices for petrol and a 5 cent increase for diesel. The government plans to fully restore the rates on October 31, with a final increase of 8 cents for petrol and 6 cents for diesel.
Despite the overall increase in prices, transport costs have actually decreased by 1.5% over the last year. This may provide some relief for consumers.
Core inflation, which excludes volatile items such as food and energy, rose by 4.8% since August last year. This is a key metric used by the European Central Bank to assess whether further rate increases are necessary. However, core inflation has remained stubbornly high, indicating potential concerns.
In comparison to other eurozone countries, Ireland’s inflation rate of 4.9% is slightly lower than the eurozone average of 5.3%. These flash estimates provided by the CSO are subject to revision when the final results are published.
Overall, the rise in inflation in Ireland reflects the ongoing challenges faced by consumers, particularly in relation to food and energy prices. The expiration of the excise duty cut on fuel prices is likely to put further pressure on households. As the final results are yet to be published, it remains to be seen whether any additional measures will be taken to address these inflationary pressures.