Irish inflation climbed to an estimated 4% in October as a fresh surge in energy costs piled more pressure on households heading into winter. Flash figures released by the Central Statistics Office (CSO) on Tuesday, 3 November, show the annual rate of price growth edged up from 3.8% in September, with energy the main culprit.
Energy bills drive Irish inflation higher
According to the CSO’s flash estimate of the Harmonised Index of Consumer Prices, energy prices jumped by around 4.5% in October alone. Over the past 12 months they are up by a whopping 18.3%.
Overall, prices across the economy rose by about 0.5% between September and October.
The picture was very different elsewhere in the shopping basket. Food prices barely moved, rising by just 0.1% in the month and 0.1% over the year. Services prices actually dipped by 0.2% in October, although they remain 3.5% higher than a year ago.
Core prices cooling
Stripping out the most volatile items gives a calmer reading. CSO statistician Anthony Dawson said that when energy and unprocessed food are excluded, prices rose by 2.5% in the year to October.
That core rate is down from 2.8% in September and, according to RTÉ, is back around the level seen before the conflict in the Middle East pushed up global fuel costs.
The CSO cautioned that the flash numbers are early estimates and may be revised when the full October figures are published on 12 November.
Food bills could be next
Economists are warning that the worst may not be over for family budgets. Kate English, chief economist at Deloitte Ireland, pointed out that the jump in fuel costs has not yet fed through to supermarket shelves.
She noted that the ESRI has estimated rising energy prices take eight to ten months to show up in food prices, raising the prospect of a sharper rise in grocery bills next year.
“People are facing into a winter with much higher energy costs,” she told RTÉ. She added, according to the Irish Examiner, that the strength of the Irish economy would be “of little comfort to people heating their home”.
Second energy shock in a few years
English linked the spike to the continuing conflict in the Gulf region and said this was the second time in recent memory that Ireland and Europe had been hit by an energy shock caused by war, following Russia’s invasion of Ukraine.
She argued the long-term answer is a more sustainable energy system built on renewables, so that households are less exposed to swings in global oil and gas markets.
What it means for your money
For households, the latest Irish inflation figures underline that heating and fuel are where the pain is concentrated. With colder months ahead, it may be worth checking whether you are on the best available energy plan, keeping an eye on fixed-rate offers and budgeting for higher bills over the winter.
Eurozone-wide inflation figures for October were due to be published on Wednesday, giving a clearer view of how Ireland compares with its neighbours.
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Sources: RTÉ News, Irish Examiner, CSO
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