Inflation at highest level in almost six years

[Johnny]

"Figures released by the Central Statistics Office show the annual rate of inflation climbed to 5.2% in January, its highest level for almost six years. The rate compares with 4.9% in December, but is not as high as some economists had expected. As expected the price of electricity and fuel, and the higher costs of borrowing money because of interest rate rises, have led to a substantial rise in inflation."

Story on RTÉ News

[Maximus]

"Figures released by the Central Statistics Office show the annual rate of inflation climbed to 5.2% in January, its highest level for almost six years. The rate compares with 4.9% in December, but is not as high as some economists had expected. As expected the price of electricity and fuel, and the higher costs of borrowing money because of interest rate rises, have led to a substantial rise in inflation."

Story on RTÉ News

I understand the rate of inflation as measured by the EU Harmonised Index of Consumer Prices (HICP) was 2.9 per cent in January - down from 3.0 per cent in December. The HICP is a better measure with which to compare our trading partners - as mentioned above the pickup in inflation during the last year was mainly due to external developments, namely increases in interest rates - if interest rates changes were removed, CPI inflation would currently be running at 2.7 per cent.

I think the fact that the Quarterly National Household Survey for Q4 2006 showed that unemployment fell from 4.4 per cent to 4.2 per cent shows the underlying strength of the economy is still constant.

[HillstreetBlues]

I think the fact that the Quarterly National Household Survey for Q4 2006 showed that unemployment fell from 4.4 per cent to 4.2 per cent shows the underlying strength of the economy is still constant.

I like your optimism – unfortunately I don’s share it. Undoubtedly there have been inflationary pressures building up in the economy. Many of the inflationary pressures may be external but a decisive government could take action to help dampen these pressures. We can’t rely on the construction industry to prop up our economy forever – we haven’t invested enough in the so called ‘knowledge economy’ to replace the decreasing manufacturing sector. We haven’t done enough to support indigenous industry either. Public sector pay hikes / benchmarking has been a disaster – huge pay outs (inflationary pressure) and little or no return in terms of increased productivity. It is time for government to take firm decisive steps now rather relying on the same old rhetoric and hoping the fair winds continue…

[cyberianpan]

Also in this age of Information Technology a blanket inflation rate is a poor service for the CSO to deliver. Fact is say a single male age 25 living in Dublin city centre will have very different spending characteristic to a couple with 4 kids in Tralee.

The CSO ought publish inflation rates for demographic clusters & preferrably allow people determine their own by entering characteristics in a www calculator (done in UK recently).

The variance across groups can be > 100%, CSO inflation rate is a very crude measure.

cYp