ANNUAL INFLATION RATES in Ireland are below 2% for the first time in over three years.

The Consumer Price Index (CPI) is Ireland’s official measure of inflation.

Around 50,000 prices are collected for the CPI from a basket of goods containing 612 items which aims to reflect what average households arespending their money on.

Figures released today by the Central Statistics Office(CSO) show that the CPI rose by 1.7% between August 2023 and August 2024.

This is down from an annual increase of 2.2% in the 12 months to July 2024 and the first time since June 2021 that the CPI increase has been below 2%.

Excluding energy and unprocessed food, the CPI went up by 2.9% in the 12 months to August 2024.

The 612 items in the CPI can be broken down into 12 divisions.

The largest increases in these divisions in the year to August were seen in Restaurants & Hotels, where prices rose by 4.5%.

The CSO said this increase is largely down to higher prices for alcohol and food.

This is followed by Miscellaneous Goods & Services, such as car insurance and hairdressing which rose by 4.1%.

On the other end of the scale, the divisions with the largest declines in were clothing and footwear, down 6.2%, and housing, water, electricity, gas and other fuels, which decreased by 1.9%.

The CSO said clothing and footwear prices were down due to lower prices for garments, but noted that decreases across the housing costs division were partially offset by an increase in the cost of mortgage interest repayments and rents.

The CSO also tracks monthly increases, and in the month from July to August, consumer prices rose by 0.1%, compared to a 0.7% rise for the same period in 2023.

In August 2024, the most significant monthly price changes were increases in Clothing and Footwear, up 2.8%, and Restaurants & Hotels, up 0.5%.

Recreation & Culture, down 1.4%, and Transport, down 0.8%, were the only divisions to show a decline when compared with July 2024.

Recreation & Culture decreased primarily due to a fall in the cost of package holidays, while transport cost fell mainly due to lower prices for airfares.

Elsewhere, a spokesperson for Peopl Insurance remarked that “while the news that inflation has fallen below 2% will be a relief to consumers, the reality is that prices are still increasing – and from a much higher base”.

Paul Walsh added that “consumers are still feeling the impact of the record-high inflation of recent years and this will continue for some time”.

He also noted that heading into Autumn, people will start to use heating again and families “will start to feel the pinch of hearting and electricity bill soon”.

Walsh also pointed to the carbon tax increase that will take effect from 9 October, which will add 2.1 cent per litre of petrol and 2.5 cent per litre of diesel, as another thing that “will hit many consumers in the pockets”.

He said it’s “crucial” that cost-of-living measures are “very much at the heart of the Government’s upcoming Budget and that Ireland’s runaway prices are tackled”.