Consumer prices see sharpest monthly fall since 2016

Consumer prices fell 0.8 per cent in January, their sharpest monthly decline since 2016, new figures from the Central Statistics Office (CSO) show.

However, the Consumer Price Index is still higher than this time last year, showing a 7.8 per cent increase in the 12 months to January.

The CPI is a measure of inflation, showing the change in the cost of goods and services from one period to the next.

January's 12-month figure was down from December, when an annual increase of 8.2 per cent was noted.

The CSO said January was the 16th straight month where the annual increase in prices has been at least 5 per cent. The main drivers of higher living costs in the year to January were housing, energy and food.

The areas which saw the largest decreases in the year to January were education (down 7.2 per cent) and miscellaneous goods and services (down 0.7 per cent).

Household energy costs were the main contributors to the January CPI with the cost of gas up by over 86 per cent, electricity up by almost 63 per cent, and home heating oil prices up by 35 per cent.

Food prices also saw increases over the last 12 months with whole milk up 31 per cent, butter up 23 per cent, and bread up 17 per cent when compared with this time last year.

On a monthly basis, clothing and footwear saw the biggest decline from December to January (down 6.4 per cent), followed by transport (down 2.9 per cent), while alcoholic beverages & tobacco had the biggest increase (2.5 per cent).

Marian Ryan from consumer advocacy group Taxback.com said: “The latest CSO figures thankfully show that inflation continues on its downward trajectory, with inflation easing off in January, at 7.8 per cent.”

“However, inflation is still incredibly high and a huge burden on many households and businesses,” she said.

“Taxback.com is reiterating its call on the Government to extend the reduced 9 per cent VAT rate on energy bills and on the hospitality sector beyond February 28th. It is also calling on the Government to extend the current excise duty reductions on petrol and diesel beyond February 28th too,” she said.