Higher costs for air fares and restaurant prices sees inflation rate rise

Higher costs for air fares and rising restaurant prices saw the inflation rate move up slightly.

The annual inflation rate crept up to 0.7pc in December compared with the same month in the previous year.

The annual rise was 0.6pc in November.

The slight rise in the inflation rate was despite falls in petrol and diesel prices, and hotel accommodation costs, according to the Central Statistics Office.

Prices were unchanged in the month, compared with a monthly decline of 0.5pc in November.

In the last year consumers have been hit by higher rents and mortgage interest repayments, in addition to an increase in the price of electricity, home heating oil and gas.

Restaurants and hotel prices increased primarily due to higher prices for alcoholic drinks and food consumed in licensed premises, restaurants and cafes.

These rises came ahead of the move to restore the valued added tax (VAT) rate for the hospitality sector to 13.5pc.

The tax for the sector was cut to 9pc to stimulate the tourism industry in 2012, but was restored from January 1 as part of Budget 2019.

The cost of cigarettes rose in December, the CSO said. The Budget saw the excise duty on cigarettes rise again.

Motor insurance prices fell by 7pc, the statisticians said. This is despite many people saying the cost of their motor cover continues to rise.

But home insurance premium rates rose by 3.5pc, with fuel prices down by almost 6pc in the year.

Potatoes prices rose by 14.6pc, as the dry summer caused the yields of the crop to plummet.

Food and non-alcoholic beverages prices fell due to lower prices across a range of products such as meat, bread and cereals, sugar, jam, honey, chocolate and confectionery and fruit.

Rental costs were up by 6.2pc,as the supply shortage continues to put tenants at a disadvantage when trying to negotiate leases.

Mortgage interest costs rose by 1.3pc, despite a number of lenders cutting their fixed rates. Existing mortgage holders may not be doing enough to seek out better deals, financial experts said.

Electricity prices rose in December as a raft of suppliers put up their tariffs. And home heating oil costs were up 7.2pc in December compared with a year ago. However, the is a lower rate of increase than previously, as heating oil prices were rising at a rate of 30pc at one stage last year.

Looked at over longer period, prices have gone up for households in a number of areas.

Between last year and 2014 education costs are up almost 12pc.

What the CSO classifies as housing, water, and energy costs are up 8.5pc over the same period.

Prices of restaurants and hotels, alcohol and cigarettes are also up.

The largest decreases were for furnishings, household equipment and routine household maintenance, clothing and footwear and food

The overall increase in the consumer price index over this period was 0.6pc.

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