According to the Central Statistics Office (CSO), as of January 2025, prices in Ireland had increased by 1.9% over the past 12 months.
The data show that the inflation rate (the rate at which prices rise) has risen slightly since December, when the annual rate was 1.4%.
The CSO analyzes price changes over the previous 12 months to calculate inflation.
Inflation peaked in 2022 at 9.2%, driven by increased demand for oil and gas following the Covid pandemic. Energy prices rose again after Russia's invasion of Ukraine.
Since then, inflation has remained well above the European Central Bank's 2 percent target, partly due to high food prices.
Some sectors of the economy continue to experience significant price increases.
The largest increase over the reporting period (as of January) was recorded in restaurants and hotels – by 3.9%, which is due to the rise in prices for food and drinks in pubs, restaurants and cafes.
Over the year, the price of a pound of butter has increased (by 55 cents), Irish cheddar per kilogram (by 35 cents), two litres of 3.5% milk (by 18 cents), a 2.5 kg bag of potatoes (by 11 cents) and 500 g of spaghetti (by 1 cent).
Loaves of black and white bread fell in price by 2 and 1 cent, respectively, compared to January last year.
The news comes weeks after the European Central Bank (ECB) decided to cut interest rates to 2.75% at its first monetary policy meeting this year.
Lower interest rates will make loans cheaper for consumers, although depositors will receive less profit.
Last June, the ECB cut its key interest rate from a historic high of 4% to 3.75%, the first cut in five years.
In September 2024, rates were reduced to 3.5%, in October to 3.25%, and in December to 3%.
Karl Kelly, a private client adviser at insurer NFP Ireland, said rising food and housing prices were putting a real strain on household and individual budgets.
“While inflation may have slowed, the reality is that many households are facing rising costs of living that are outpacing wage growth, making it more difficult to manage day-to-day expenses,” he said.
“With global uncertainty and rising prices, many people are becoming more cautious about their spending.”
Dominic Lumsden of Peopl Insurance noted that while inflation had fallen from the record levels of recent years, prices were still rising – and from a much higher base.
“Consumers are still feeling the effects of the record high inflation of recent years, and this will continue for some time.”
Mr Lumsden added: “The cost of living remained a key issue in the general election last November. The new Government needs to deliver on its promises to tackle the high cost of living in Ireland so that people can afford both the day-to-day expenses and the discretionary spending that can make a significant difference to their standard of living and quality of life.”
Earlier this month, the prime minister said there were no plans to continue energy loans or introduce a new cost-of-living package in the next budget.
Energy loans were included in last year's budget in October as part of government measures to combat inflation and rising living costs.
Sourse: breakingnews.ie
