Category: Archive

Irish inflation rate holds steady at 6.2 percent

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — There was relief for the government this week as figures released by the Central Statistics Office showed the annual inflation rate in September remained unchanged at 6.2 percent.

Inflation is at a 15-year high and is more than twice the EU average but has remained peaked at 6.2 percent since July.

Prices rose by 0.4 percent in September, compared to 0.5 percent in August.

The most significant increases in the month were clothing, up 2.4 percent; oil and gas, up 1.9 percent, and mortgages and rents, up 1.6 percent.

The biggest annual changes have been for tobacco, up 17.4 percent; housing, up 16.6 percent; energy costs, up 9.1 percent, and transport, up 7.1 percent.

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Inflation has been increasing steadily since it bottomed out at 1.2 percent in July 1999.

As a result of rising prices, a key national partnership pay deal is being reviewed in talks involving the government, employers and unions. Workers are seeking an extra pay increase to compensate for inflation.

Inflation has more than doubled since the deal, the Program for Prosperity and Fairness was agreed last March on the basis of a projected 2.5-3 percent annual rate during its 33-month lifetime.

Inflation has eroded the PPF’s first 5.5 percent pay rise. The deal is set to deliver 15.75 percent in pay increases and 10 percent in tax cuts in three phases.

Unemployment is down to 3.8 percent. As a result, many employers are already paying over the odds to keep staff, particularly in the buoyant computer industry.

Many unions are also ignoring the deal’s terms and have submitted extra claims.

Finance Minister Charlie McCreevy is under pressure to make tax and social welfare concessions in his December budget to compensate for rising prices.

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