Inflation in the Irish economy fell for a fourth consecutive month in June but the drop was overshadowed by a rise in core inflation linked to higher mortgage costs and more expensive airfares
ECB policymakers, who are expected to announce another rate hike later this month, are increasingly focused on core inflation, which remains elevated across the currency area.Higher transport costs, which rose by 2.5 per cent on a monthly basis in June, also drove the underlying rate of price growth in the Republic. This was linked to higher air fares, which were up by 34 per cent year on year.
The CSO noted that prices here have been rising on an annual basis since April 2021, with annual inflation of 5 per cent or more recorded in each month since October 2021. The most significant rises in the year were seen in the housing, water, electricity, gas and other fuels category, which was up 15.7 per cent. Within this, the cost of electricity and gas increased by 35 per cent and 47 per cent respectively.
Private-sector rents, meanwhile, were up by 7.7 per cent. The annual change in recreation and culture costs reflect a rise in price of package holidays , the CSO said.Inflation across the euro zone fell to 5.5 per cent in June.
The 0.25 per cent increase in June is being viewed by some investors as the penultimate hike in the current sequence, with a further quarter-point hike this month now priced in. This would lift the ECB’s main refinancing rate, the one that affects mortgages, to 4.25 per cent.
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