Prices in Ireland rose 2.2% in July compared to the same period in 2020, according to new data released by the CSO.
On a monthly basis, prices rose by 0.4% in July compared to June 2021.
The July figures represent the first time since August 2012 that year-on-year inflation surpassed the 2% mark.
The acceleration in inflation was largely down to increases in the price of cars, petrol and diesel, airfares, rents, hotels and alcohol.
In Association with
In transport, the price of cars was up 6,5%, the price of motor fuels was up by 12.8% and the price of airfares was up by 15.7%.
The supply of cars has been adversely affected by the global chip shortage, while demand for fuels and airfares is rebounding strongly from the pandemic-induced nadirs of last year.
Utility Price Hikes
The price of electricity and gas has surged by 13.9%, similar to trends witnessed across Europe, largely due to higher oil prices, increasing demand and more stringent carbon pricing.
The increasing cost of rents dovetails with reports elsewhere of critically low rental supply sending average rents soaring.
The price of 'accommodation services' also increased by 13% as bumper demand for staycations brushed up against capacity limitations.
On the positive side, the price of clothing and footwear was down 7.1% on the back of sales, while the price of motor insurance was down 6.5%, perhaps due to new personal injuries guidelines and the falling cost of claims.
The price of certain non-durable household items like light bulbs and dish soap fell, while the price of durable items like dishwashers and washing machines went up.
The price of beer and spirits was up in licensed premises but down in off-licenses, while the price of wine was up in both locations.
The acceleration in Irish inflation is part of a pattern seen elsewhere in advanced economies where Covid restrictions are loosening and there is a well of pent-up demand, in particular the United States.
• To read more about this phenomenon, pick up the latest issue of Business Plus.
