Inflation in the Irish economy remained elevated at 2.7 per cent in October with increases in energy and food prices the main drivers, putting a renewed strain on households.
The latest flash estimate for the harmonised index of consumer prices (HICP) put the annualised rate of price growth at 2.7 per cent, unchanged from the previous month.
This compares to a headline rate of 2.2 per cent for the euro zone as a whole.
A breakdown of the components indicate energy prices here grew by 2 per cent in October and were up by 2.7 per cent on a 12-month basis.
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Food prices are estimated to have increased by 0.3 per cent in the past month and risen by 4.6 per cent in the past 12 months.
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The acceleration in basic grocery costs is now the main pressure on household budgets. Retail analysts Worldpanel by Numerator estimates food inflation here is now running 6.5 per cent.
Excluding energy and unprocessed food, the HICP’s underlying rate is estimated to have increased by 2.6 per cent since October 2024.
Inflation as measured by the HICP had fallen to almost zero at the end of last year on the back of falling energy prices.
Economists have warned that statistical base effects would see inflation temporarily increase in the second half of 2025.
Robert Purdue, senior portfolio manager at Ebury (Ireland), said: “Inflation is heating up in Ireland, with prices rising 2.7 per cent over the past year and 0.2 per cent since September.
“The shock GDP contraction of 0.1 per cent in Q3 – the first quarterly fall in almost two years - adds another layer of uncertainty," he said.
“At the same time, tariffs are squeezing business margins, and some firms may pass these added costs on to consumers, which could intensify inflationary pressures.
“Combined with the budget boosting government spending by more than 7 per cent, the risk of a renewed uptick in prices is very real,” he said.
