Inflation falls despite layoffs

By Andrew Bushe

DUBLIN — Despite high-profile job losses, new figures from the Central Statistics Office revealed inflation fell last month to 4.8 percent — the lowest since March last year.

Falling oil prices and the impact of the summer sales combined to cut the July rise by half a percent from the June figure of 5.3 percent.

It was the fourth consecutive monthly fall from this year’s peak of 5.6 percent in April and will ease pressure for wage increases.

“Despite pessimistic news earlier this week on the jobs front, the underlying performance of the Irish economy remains strong and we should not lose sight of the fact that we continue to enjoy growth levels that are the envy of our European partners,” said the government’s chief whip, Seamus Brennan.

Consumer prices decreased by 0.3 percent in July, compared to a 0.3 percent increase in the same month last year.

After inflation reached a high of 7 percent last November, there were predictions the economy would overheat but it fell back to 5.2 percent in January. It then began to increase again before peaking in April.

The November high was the country’s worst inflation figure since August 1984. Inflation had previously bottomed out at 1.2 percent in July 1999.

The CSO said the harmonized index of consumer prices, used for comparisons with other EU states, fell by 0.3 percent in July to an annual rate of 4 percent.

The June average inflation for the 12 euro-currency countries was 3 percent and for all of the 15 EU states it was 2.5.

The main factors that pushed up Irish prices in July were higher costs for housing, services such as package holidays, child care and hairdressing, fuel and light and food.

The annual summer sales led to a 15 percent drop in the cost of clothing and household goods and a fall in the price of fuel resulted in cheaper transport costs.

A July fall was expected because of the seasonal factors associated with summer consumer spending but it was not predicted to be so high.