14 March 2008

Inflation rises to 4.8%

The newest data released by the Central Statistics Office (CSO) in Dublin show that the annual rate of inflation in the Republic of Ireland has risen to 4.8% in February, from 4.3% the previous month. Consumer prices in February rose by 1.2% in the month, compared with a rise of 0.8% the same time last year. Inflation last stood at 4.8% in October of last year.

According to the CSO the rise is mainly a result of the continuing increases in food prices, which I already observed and wrote about two weeks ago. (see my entry "Irish Food Prices are rising too fast" of February 28th)
Prices for food are rising indeed, on average by 1.8%, with significantly higher prices seen in a wide range of products, including milk, butter, cheese, meat, bread and cereals.

Many of the most significant increases are only possible because many consumers with secure incomes seem to be willing to pay any price for food. Would they draw a line for certain items and shop around a bit, they would not only save a lot of money, but also force greedy grocers and supermarkets to re-adjust their prices to the true market value. Prices as they are charged here in Ireland would lead to riots in France and many other EU countries.

The ending of the January sales might also have had some influence on the rise of the inflation rate. The CSO says that the annual rate of inflation for services was 5.6% last month, while goods increased by 3.9% in the year.

The prices of clothing and footwear rose by 12.7%, due to a recovery in prices after the ending of the traditional January sales. Furnishings and household equipment prices also rose by 2.8% after the sales.

Last month also saw increases in average mortgage interest repayments and rents.

The Emerald Islander

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