February 16, 2011
By Staff Reporter
By Andrew Bushe
DUBLIN — Inflation increased to an annual 4.3 percent in February, according to figures released by the Central Statistics Office. Prices are now increasing at almost three times the 1.6 percent rate for February 1999.
Inflation is running at levels that have not been experienced for a decade and puts the country at the top of the EU league, where the average level is 1.8 percent.
Finance Minister Charlie McCreevy said last month that he expected the rate to "peak a little bit" and then come back to an average of about 3 percent for the year.
"But I do not think it is anything to be alarmed about," he said.
The most significant increases in the consumer price index in February were clothing up 8 percent, following the end of the winter sales; household goods up 2.9 percent and housing up 0.8 percent, following mortgage interest rate rises.
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The latest inflation index news comes as over 500,000 trade unionists are voting on a new national partnership pay deal, the Program for Prosperity and Fairness, which will give about 15.75 percent in pay rises and 10 percent in tax cuts over 33 months.
McCreevy can’t use economic tools like currency changes or raising interest rates to combat inflation as the economy is subject to monetary policy set by the European Central Bank as a result of Ireland’s membership of the EMU.