Inflation fears prompt Central Bank warning

By Andrew Bushe

DUBLIN — Ireland’s inflation rate showed a slight dip in May, to 4.7 percent, but it remains more than twice the EU average and the price of many common services and goods is roaring ahead at about 10 percent.

Earlier this month, the Central Bank warned that rising prices and wages are the biggest threat to competitiveness and the economy.

While the inflation rate showed a slight 0.1 percent fall to 4.7 percent in May, figures from the Central Statistics Office show that goods and services such as childcare and professional fees increased by 10.8 percent.

Health charges were up 10.2 percent on the year, education was up 9.7 percent, charges in restaurants, hotels and pubs were up 7.4 percent, and entertainment costs — grouped as recreation and culture — were up 7.2 percent.

The Irish Business and Employers’ Confederation called for a new focus from government on comprehensive action to curb and for it to be given top priority.

It said excessive wage increases have pushed up the cost of services and labor intensive goods and this was most evident in the state sector.

Fine Gael’s new finance spokesman, Richard Bruton, said inflation “continues to sound alarm bells” for the government’s economic management.

Commentators were forecasting inflation would average about 5 percent for the year.

The most significant increases during May were for transport (up 1.3 percent), communications (up 1.2 percent), health (up 1.1 percent), food (up 0.6 percent) and restaurants and bars (up 0.5 percent).