Inflation hits 14-year high as energy costs rise by 5.1%

The main driver of energy costs was the price of electricity, which was up by an average of 15.5 per cent on this time last year, while gas prices were up 22.6 per cent. Home heating oil was up 70 per cent.
Inflation hits 14-year high as energy costs rise by 5.1%

Digital Desk Staff

Irish inflation shot to a 14-year high in October as rising energy costs, supply shortages and increased consumer demand drove up prices.

As The Irish Times reports, over the past 12 months, prices have risen by 5.1 per cent, according to the latest consumer price index from Central Statistics Office (CSO). The rise was the largest recorded since April 2007.

According to the CSO, the sectors with the largest increases were transport (+15.4 per cent), housing, water, electricity, gas and other fuels (+10.8 per cent), communications (+5 per cent) and restaurants and hotels (+4.1 per cent).

The main driver of energy costs was the price of electricity, which was up by an average of 15.5 per cent on this time last year, while gas prices were up 22.6 per cent. Home heating oil was up 70 per cent.

Within the transport category, the cost of petrol and diesel rose 21.6 per cent and 25.3 per cent respectively.

An increase in carbon tax included in last month’s budget is expected to further accelerate fuel and heating prices. The figures show air fares were up 72.4 per cent year-on-year.

The cost of housing was driven up by private rents, which increased by an average of 7.5 per cent over the past 12 months, while the cost of mortgage interest rose by 3 per cent. On the downside, the price of clothing and footwear fell 2.4 per cent.

Prices on average have now increased for 12 straight months, the longest sequence of monthly inflation since 2007. The cost-of-living squeeze comes amid a pick-up in inflation across the globe linked to energy prices and the post-Covid rebound.

US inflation rose to a 30-year high of 6.2 per cent this week. Last week US Federal Reserve chairman Jerome Powell warned that inflation had been “longer lasting than anticipated”.

Mr Powell said the Fed still expected recent price rises to be “transitory” but added that it was “very difficult to predict the persistence of supply constraints or their effects on inflation”.

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