Rate of inflation eases to 1.1% in February

Thursday 14 March 2013 17.44
Hairdressing prices fell in February, CSO notes
Hairdressing prices fell in February, CSO notes

The annual rate of inflation fell to 1.1% in February from a reading of 1.2% in January.

New figures from the Central Statistics Office show that consumer prices rose by 0.8% in the month, which compared to a rise of 0.9% the same time last year.

The CSO said that the price of clothing and footwear rose by 7.1% last month after the traditional winter sales came to an end.

It also noted a rise in the prices of furnishings, household equipment and ''routine household maintenance'', but said that hairdressing costs fell last month.

On a yearly basis, alcohol and tobacco prices increased by 5.4%, while education costs grew by 7.4% and miscellaneous goods and services rose by 2.9%.

The CSO said that costs for communications, furnishings and household equipment and clothing and footwear all fell on an annual basis.

The CSO said that the annual rate of inflation for services was 1.7% in the year to February, while goods increased by 0.3%.

The EU Harmonised Index of Consumer Prices increased by 0.8% in February, compared with a rise of 1.1% the same time last year. Prices on average, as measured by the HICP, were 1.2% higher in February compared to February 2011.

Commenting on today's consumer price index figures, Merrion economist Alan McQuaid said that domestic inflationary pressures in Ireland are likely to remain depressed for some time to come.

''Continued weak consumer demand will put downward pressure on prices in the months ahead. The fiscal measures announced in Budget 2013 will again hit disposable incomes, which in turn will weigh negatively on spending power,'' he said.

''However, indirect tax hikes will add to the CPI in the coming months, but in overall terms it is very much a picture of subdued price pressures, which will help ease the pain to some degree on the household sector,'' the economist added.