skip to main content

Mortgage costs a factor in inflation rise

Inflation rate moves up to 2.6%
Inflation rate moves up to 2.6%

Official figures show that the annual rate of inflation moved up to 2.6% in September from 2.2% in August.

Increases in clothing and footwear prices and higher mortgage repayments were among the main factors pushing prices up last month, according to the Central Statistics Office.

The CSO said consumer prices rose by 0.3% compared with August, with clothing and footwear prices up 5.4% after summer sales ended.

Mortgage interest costs rose by 3.1% during September, and are up 17.2% over the last 12 months. Electricity prices were up 1.3% from August, while rents rose by 0.4%.

Restaurant and hotel prices fell by 0.4% during September, but transport costs fell by 0.7% in the month, helped by a 16.9% drop in air fares.

The EU harmonised measure of inflation - which excludes mortgage repayments - was up 0.1% last month, giving an annual increase of 1.3%.

Bloxham economist Alan McQuaid called the figures 'disappointing', as he had been expecting inflation to stay at 2.2%. But he said inflationary pressures were likely to remain subdued for some time, due to weak consumer demand.

The economist said higher energy prices would put upward pressure on inflation, but a likely ECB rate cut later this year would help keep inflation down next year.