Annual inflation holds at 3.4% in July - CSO
Annual consumer price inflation in Ireland remained stable at 3.4% in July 2026, matching the previous month's rate. The Central Statistics Office reported a 0.1% monthly increase in consumer prices, driven primarily by rising costs in recreation, sport, culture, and utilities such as housing, water, electricity, gas, and other fuels. These increases were partly offset by declines in clothing and footwear prices (-5.1%) and transport costs (-0.9%). Excluding energy and unprocessed foods, inflation stood at 3.2%. Education services saw the largest annual increase at 8.9%, followed by clothing and footwear (8.5%) and utilities (7.7%). Deloitte’s economist warned that while energy prices are lower than in 2022 and 2023, ongoing uncertainties related to global events and European heatwaves could affect winter energy costs. Food prices, particularly influenced by fertilizer costs and heatwave impacts on agriculture, remain a concern.
Higher energy prices and rising rents are intensifying the cost-of-living crisis for Irish households, according to the latest Consumer Price Index (CPI) figures released by the Central Statistics Office (CSO). Annual inflation in Ireland stood at 3.4 per cent in July, marking a slight moderation from 3.7 per cent in April. Despite this easing, the economic pressure remains significant, driven primarily by the soaring costs of housing, utilities, and transportation. The most pronounced contributor to inflation in July was the housing, water, electricity, gas, and other fuels category, which accounted for 1.2 per cent of the overall inflation rate. Private housing rents climbed by 4.5 per cent annually, while mortgage interest costs surged by 10 per cent. Electricity prices rose by 8.1 per cent compared to the same period last year, largely due to escalating global oil prices tied to conflicts in the Middle East. Home-heating oil prices, meanwhile, increased by 28 per cent, reflecting heightened demand amid colder weather patterns. Fuel costs showed mixed trends in July. While the price of petrol and diesel decreased by 4.1 per cent and 6.4 per cent respectively, these declines were partially offset by a sharp 11 per cent rise in airfares. The cost of recreational activities, including sports and cultural events, also climbed by 2.7 per cent, attributed to higher prices for package holidays. Meanwhile, school uniform costs increased marginally, while women’s footwear prices dipped by 7.4 per cent in the month, though they rose by 18 per cent over the past year. Food inflation remained relatively stable, with an annual increase of 0.7 per cent in July. The monthly CPI growth was minimal, rising just 0.1 per cent from June to July, compared to a 0.3 per cent increase in the prior month. However, the CSO highlighted that the July figures might not fully capture recent spikes in fuel and heating oil prices, which have continued to climb due to ongoing geopolitical tensions. The European Central Bank recently raised interest rates for the first time in nearly three years, responding to inflationary pressures across the eurozone. Eurozone inflation accelerated to 2.9 per cent in July, prompting forecasts of another rate hike in September. Deloitte Ireland’s chief economist, Kate English, warned that despite the current stability in inflation, the outlook remains uncertain. She pointed out that electricity prices increased by 3.7 per cent in July, contributing to an annual inflation rate of 8.1 per cent, the highest since late 2023. Gas reserves in Ireland are currently below seasonal averages, adding to concerns about energy security during the upcoming winter months. English emphasized that while energy prices are still lower than those seen in 2022 and 2023, volatility persists due to regional conflicts and extreme weather conditions. Additionally, she noted that food price inflation could worsen in the near future, citing factors such as rising fertilizer costs and the impact of heatwaves on agricultural production in Ireland and key export markets. In parallel, US inflation eased slightly to 3.4 per cent in July, driven by declining energy costs. Although petrol prices fluctuated throughout the month, averaging around $4.04 per gallon, they remained elevated compared to pre-conflict levels. Core inflation, which excludes volatile food and energy components, fell to 2.5 per cent, signaling a modest cooling trend. However, the Federal Reserve faces mounting pressure to address persistent inflationary pressures, particularly in sectors like housing, where costs rose by 3.2 per cent annually. As the economic landscape remains unpredictable, both Ireland and the United States continue to navigate the challenges posed by rising living expenses and shifting global dynamics.
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