CONSUMER PRICES stabilised in July, remaining unchanged from June and falling only 0.1 per cent compared with the same month last year.
Cheaper clothing and footwear driven by sales was offset by a 2.8 per cent rise in the cost of communications, as mobile phone and landline charges rose.
There was a 0.5 per cent rise in the cost of miscellaneous goods and services, with home insurance blamed for the increase, and a similar rise in the cost of alcohol and tobacco and health.
The latest figures show a further slowing of the annual pace of deflation. In June, prices fell 0.9 per cent compared with the previous year, while May recorded a decrease of 1.1 per cent. Deflation peaked in October, when prices were down an average of 6.6 per cent, and has slowed steadily since.
The yearly decline was led by clothing and footwear, which declined 8.5 per cent, while food and non-alcoholic beverages were 3.8 per cent cheaper than the same month in 2009. Furnishings, household equipment and routine household maintenance cost 3.4 per cent less than last year.
However, these decreases were offset by the 9.2 per cent rise in education, a 5.5 per cent rise in housing, water, electricity, gas and other fuels, and increase in the cost of transport of about 2.7 per cent. Services cost 1.4 per cent more than last year, but the price of goods fell 2 per cent.
The EU Harmonised Index of Consumer Prices fell by 0.1 per cent in the month and 1.2 per cent year on year. Commentators said the figures presented mixed news.
“While further price falls would help Ireland to regain competitiveness, at least the slowdown in deflation suggests that demand is stabilising,” said Davy analyst Aidan Corcoran.
He pointed out that core CPI, which excludes mortgages, food and energy, fell 1.7 per cent annually, compared to a decline of 2.4 per cent in the year to June.
Food rose for the third month in a row, the first time since 2008.
The Small Firms Association (SFA) said the figures showed the key fall occurred in a narrow range of goods and, although good for consumers, they were not as positive for small businesses.
The Irish Small and Medium Enterprises association called for the Government to reduce State-controlled costs and called for a review of such charges.
