inflation Archives - Manning & Co.

Inflation rate rises to 1.1% in November – CSO

New Central Statistics Office figures show that consumer prices rose by 1.1% in November from 0.7% in October on the back of higher rents and mortgage interest repayments and education costs. 

This was the highest rate of inflation since June of this year.

The CSO said that housing, water, electricity, gas and other fuel prices rose mainly due to higher rents and mortgage interest repayments as well as an increase in the cost of electricity, which was partially offset by a reduction in the price of home heating oil.

November also saw higher health insurance premiums and more expensive prices for hairdressing, but motor insurance premiums were lower. 

Meanwhile, prices in restaurants and hotels were higher on the back of more expensive alcoholic drinks and food consumed in licensed premises and restaurants, along with increases in the cost of hotel accommodation.

November also saw prices fall in the clothing and footwear sector due to sales, while prices for household goods, furniture and furnishings and household textiles were also lower.  

Food prices in general also fell due to lower prices across a range of products such as meat, milk, cheese, yoghurt, sugar, jam, honey, chocolate and sweets.

Commenting on today’s figures, economist Alan McQuaid that that overall price pressures by historical standards are likely to remain fairly muted for a while. 

Mr McQuaid noted that the country’s average inflation rate was 0.5% in 2018, marginally up from 0.4% in 2017. 

“An average inflation rate of 1% is now envisaged for 2019. A slightly higher figure of 1.3 % is currently forecast for 2020,” he added.

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Euro zone inflation confirmed as slowing to 0.7% in October

Euro zone’s headline inflation slowed in October, the European Union statistics office said today as it confirmed its earlier estimate, with energy prices falling markedly. 

Eurostat also said the 19-country bloc posted in September a larger surplus in its trade with the rest of world, as exports grew more than imports. 

Inflation was confirmed at 0.7% on the year, down from 0.8% in September, in line with preliminary estimates Eurostat issued on October 31. 

The slowdown was caused by a 3.1% drop in energy prices, which more than offset the 1.5% inflation rate recorded in services and for food, alcohol and tobacco products. 

The narrower inflation indicator, which strips out volatile energy and unprocessed food prices and is monitored closely by the European Central Bank, was confirmed at 1.2%, unchanged from September. 

Excluding energy, food, alcohol and tobacco, inflation grew 1.1% in October, Eurostat said confirming earlier figures, up from 1.0% in September. 

In a separate release, Eurostat said the bloc’s trade surplus expanded to €18.7 billion in September, up from €12.6 billion recorded in September 2018. 

It also grew from the €14.7 billion surplus posted in August. 

Despite trade tensions, the bloc increased by 5.2% its export of goods to the rest of the world in September compared to the previous year, more than offseting a 2.1% rise in imports.

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Euro zone inflation slows in September on cheaper energy

Euro zone inflation slows in September on cheaper energy

Euro zone inflation slowed further year-on-year in September because of cheaper energy, new figures showed today.

But the core measure excluding such volatile components rose, the first estimate from the European Union’s statistics office Eurostat showed.

The numbers underline the difference of opinion over the state of the euro zone economy among the governors of the European Central Ban.

The ECB wants to keep inflation below, but close to 2% over the medium term but has so far failed to boost price growth despite years of unconventional steps.

Eurostat said consumer prices in the 19 countries sharing the euro rose 0.2% month-on-month in September for a 0.9% year-on-year gain, slowing from 1% in August.

Economists polled by Reuters had expected a flat reading at 1% year-on-year.

The lower than expected September number was mainly due to a 1.8% year-on-year fall in energy prices.

Without energy and the equally volatile unprocessed food, or what the European Central Bank calls core inflation and watches in monetary policy decisions, price growth accelerated to 1.2% in September from 1.1% in August.

Also the even more restrictive core inflation measure, looked at by many market economists that in addition excludes alcohol and tobacco, accelerated to 1% from 0.9% year-on-year.

At its September 12 monetary policy meeting, the ECB decided to resume asset purchases designed to loosen monetary policy.

This decision was opposed by a third of the policymakers, including Germany’s Sabine Lautenschlaeger, whose decision to resign before the end of her term was announced last week.

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Higher rents and mortgages push inflation higher

The annual inflation rate in August rose to 0.7% from 0.5% a month earlier, new figures from the Central Statistics Office show.

Inflation had risen above 1% year-on-year for the first time in six years in March but slipped back below that level in July.

August saw consumer prices rising on the back of higher rents and mortgage repayments as well as increased health insurance premiums and more expensive hair cuts at hairdressers.

The latest figures from the CSO also show that prices in restaurants and hotels also increased last month, while the price of tobacco products rose.

But prices for furniture and furnishings, non-durable household goods and household textiles fell in August, while clothing and footwear prices were also lower on the back of sales.

The CSO noted that transport costs fell mainly due to a reduction in airfares and lower prices for petrol and diesel.

These decreases were partially offset by an increase in the cost of other services in respect of personal transport equipment and higher prices for cars.

Separate figures from the CSO today show that among 37 countries in Europe in 2018, Ireland was the eighth most expensive for food.
Ireland was also the second most expensive for non-alcoholic drinks, including minerals, water, tea and coffee.

Meanwhile, we are fourth most expensive for alcohol and third most expensive for tobacco.

The CSO said that consumer price levels in Ireland are broadly at the same level as Nordic countries such as Sweden, Finland, and Denmark.

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Annual inflation moves up to 1.1% in June

Annual inflation moves up to 1.1% in June

New figures from the Central Statistics Office show that the annual inflation rate inched up to 1.1% in June from 1% the previous month on the back of higher rents, more expensive utility bills and higher air fares.

June marks the fourth month in a row that inflation was 1% or higher.

Before this consumer prices had been broadly flat for several years despite the fact that the country’s economy has been the fastest growing in Europe.

Today’s CSO figures show that prices for housing, water, electricity, gas and other fuels rose by 4% due to higher rents and mortgage repayments as well as bigger electricity and gas bills.

Prices for alcoholic drinks and tobacco rose by 3.3% while prices in restaurants and hotels increased by 3.1% due to higher prices for people eating and drinking out.

Education costs rose by 1.7% while transport costs were also higher on the back of an increase in air fares and higher prices for cars.

Meanwhile, the cost of communications fell by 6.6%, while clothing and footwear prices reduced by 1% due to sales.

June also saw lower car insurance premiums and cheaper prices for appliances, articles and products for personal care, the CSO added.

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Annual inflation hits seven-year high of 1.7% in April – CSO

Annual inflation hits seven-year high of 1.7% in April – CSO

Inflation hit a seven-year high of 1.7% in the year to April, new figures from the Central Statistices Office figures show.

Today’s CSO figures are a sign of significant consumer price growth in the country after four years as European Union’s best performing economy.

Consumer prices, which have been broadly flat since 2012, grew 1.7% year-on-year in April, up from 1.1% in March on the back of more expensive rents and mortgage interest repayments as well as higher prices for diesel and petrol.

Consumer prices on a monthly level rose by 0.4%, today’s CSO figures show.

The CSO said that Housing, Water, Electricity, Gas and Other Fuels costs rose by 4.7% due to higher rents and mortgage interest repayments as welll as an increase in the price of electricity, gas and home heating oil.

Prices in restaurants and hotels increased by 3.7% in the year to April, while alcohol and tobacco prices increased by 2.4%.

Transport costs also rose by 3.7% last month, mainly due to an increase in air fares and higher prices for diesel, petrol and motor cars.

However, April also saw lower motor insurance premiums and a reduction in prices for appliances, articles and products for personal care and other personal effects, as well as cheaper furniture and furnishings, the CSO added.

While the increase was probably exaggerated by Easter, Ireland appears to be moving into a slightly higher inflation environment, commentedd Austin Hughes, Chief Economist at KBC Bank Ireland.

“By and large it is healthy because the two elements that are driving it are the strength of domestic demand and the fact we are not seeing a collapse in sterling,” he said.

“There is a little less pessimism about the UK economy and that also is a positive for the Irish economy,” the economist added.

The average annual inflation rate for 2018 was 0.5%, up from 0.4% in 2017 and no change in 2016, according to CSO data.

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Easter inflation bounce won’t end slowdown fears

Easter inflation bounce won’t end slowdown fears

A rise in headline inflation in April should have given comfort to the European Central Bank, but the pick-up was due to a rise in package holiday and airline fare prices at Easter and is set to fall back as the year progresses.

Data from the European Statistics Agency issued yesterday showed the headline inflation rate picked up to 1.7pc from 1.4pc in May and at first brush appeared to chime with some bullish economic reports that had suggested the global economy had regained its mojo.

Coming hard on the heels of news that Italy had emerged from recession in the first quarter of the year and that growth in the bloc as a whole came in at 0.4pc quarter on quarter, the impression among many economists and money managers was that the panic had been overdone.

Economists at consultancy Capital Economics forecast inflation would fall back to 1pc this year and stay there as exports, household consumption and investment remain subdued.

It may be time too to prick some of the optimism that has surrounded the world economy after blockbuster annual growth of 3.2pc in the United States for the first quarter and data from China that put growth in the same quarter at 6.4pc.

Those numbers suggested to some that fears of a slowdown were overdone and investors piled yet more money into stock markets, pushing US indices to record highs.

Federal Reserve Chairman Jerome Powell reinforced the upbeat view of the economy at the central bank’s policy meeting earlier this week when it left interest rates unchanged.

The analysis from Fed policymakers was that economic growth, a strong labour market and an eventual rise in inflation were still “the most likely outcomes” as the US expansion nears its 10-year mark, closing on an all time record.

The analysis from Fed policymakers was that economic growth, a strong labour market and an eventual rise in inflation were still “the most likely outcomes” as the US expansion nears its 10-year mark, closing on an all-time record.

That will surely please President Donald Trump, whose re-election campaign depends on a growing economy and buoyant stock market, even though his call for a one percentage point cut in interest rates was ignored by the Fed.

Governor Powell played down the Fed’s failure to raise inflation, which fell to 1.6pc in March, down from February’s 1.7pc and well below the bank’s target of 2pc.

He even described the decline in inflation as being just “transitory”, and while the Fed’s inflation record has been better than that of the European Central Bank, it has been here before and failed to spot a sharp sustained fall in inflation in September 2017 caused by falling phone contract prices.

That policy torpor may turn out to be a big misreading of the economy, according to Steve Blitz, chief US economist at TS Lombard.

“Our reading of recent economic data suggests that the time to be pre-emptive should be now. A slowdown strong enough to pull inflation lower is in the making,” he said.

The latest Institute of Supply Management (ISM) survey of manufacturers last week showed manufacturing hit a two-and-a-half-year low in April and fewer and fewer companies in the sector were seeing inflation.

“In sum, the Fed has moved to the sidelines and out of the policy spotlight. Our read of the data is that by late summer, inflation will be low enough for long enough to pull the Fed back into the game and cut rates,” Mr Blitz said. Survey data such as the ISM series and purchasing manager indexes (PMI) provide a much more up-to-date assessment of the economy than some of the big headline numbers like gross domestic product and employment.

A similar picture has emerged in Europe where the Composite PMI declined for the second month in a row, while the Services PMI – which had been performing well up to now – fell in April and a steep fall in industry confidence pulled the eurozone Economic Sentiment Indicator lower in April.

If the world economy does start slowing rapidly, the effects will be felt here thanks to our high dependence on exports. The Department of Finance has based its forecast of 3.9pc growth on an expectation of 1.2pc growth in the eurozone and 2.3pc in the US for this year.

Recent survey data here has also raised some concerns over the outlook for economic growth with the AIB Ireland Services PMI released yesterday showing that growth in the sector had slowed to a three-month low. Job growth was down and in a parallel with the United States, cost inflation fell to its slowest in over a year.

“Taken together with Wednesday’s Manufacturing PMI report, these releases point to slightly weaker expansion at the start of Q2,” said Philip O’Sullivan, chief economist for Ireland at Investec.

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