Irish inflation rate: How quickly are prices rising?

Tomas Doherty

Prices in Ireland went up by 1 per cent in the 12 months to November 2024, according to the Central Statistics Office (CSO).

The figures show that inflation, the rate at which prices are rising, has ticked up slightly since October when the annual rate was at 0.7 per cent.

The CSO monitors price changes over the previous 12 months to calculate inflation.

Inflation soared in 2022 to reach 9.2 per cent, mainly due to greater demand for oil and gas after the Covid pandemic. Energy prices surged again when Russia invaded Ukraine.

It then remained well above the European Central Bank's 2 per cent target partly because of high food prices.

Some parts of the economy are still experiencing substantial price jumps.

The most significant increases in the year to November were in restaurants and hotels, up 3.8 per cent, reflecting higher prices for food and drinks consumed in pubs, restaurants and cafes.

There were price increases over the 12-month period for a pound of butter (up 58 cent), a 2.5kg bag of potatoes (up 18 cent), two litres of full fat milk (up 13 cent) and spaghetti per 500g (up 1 cent).

Loaves of white and brown sliced pan bread dropped by 3 cent and 1 cent respectively when compared with November last year.

The figures came as the European Central Bank (ECB) decided to cut interest rates to 3 per cent at its final monetary policy meeting of the year.

Falling interest rates will lead to cheaper borrowing for consumers, though savers will see lower returns.

In June, the ECB cut its main interest rate from an all-time high of 4 per cent to 3.75 per cent, the first fall in five years.

It cut rates again to 3.5 per cent in September, and again to 3.25 per cent in October.

Robert Purdue from global financial services firm Ebury said the latest inflation figures provided a mixed picture for the Irish economy as the year draws to a close.

"Persistent inflation remains a challenge, while potential US tariffs could threaten Ireland’s export-driven recovery," he said.

He said further cuts in interest rates by the ECB may be hampered by potential political instability in Europe and the prospect of US trade disruption.

"For Irish businesses, lower rates will be a welcome relief, helping to reduce debt burdens and reignite investment.

"Markets are anticipating a string of ECB rate cuts in 2025 with a terminal rate of around 1.5 per cent but will be watching closely at potential turbulence from the incoming Trump administration."