IRISH CONSUMER PRICES were on average 5.5% higher in December than they were a year previous, the largest annual change in prices recorded since 2001, the Central Statistics Office has said (CSO).

However, the rate of consumer inflation moderated somewhat in December from previous months, according to the latest Consumer Price Index.

It means that Irish consumer price inflation averaged out at +2.4% for the whole of 2021.

That compares with a -0.3% decline in prices over the course of 2020 when consumers were largely unable to spend money on goods and services due to public health restrictions. 

Prices jumped just 0.5% in December from November — marking the 14th consecutive month of inflation — but down from a pace of 0.6% in November and 0.7% in October.

The most significant monthly price changes were increases in the transport (+2.9%) and furnishings and household equipment (+1.4%) categories with households getting ready for Christmas.

Furniture and furnishing prices, in particular, jumped 4.4% in the month from November while household appliance prices increased nearly 2%.

According to the figures, the large monthly increase in transport prices is mostly related to higher prices for airfares, which jumped 42.5% in the month and 66% in the year from last year when travel was largely constrained due to Covid restrictions. 

Higher transport-related prices, due mostly to rising petrol and diesel prices, also made the largest contribution to annual inflation in the year from December 20202, the CSO said.

Prices at the pump have surged over the past 12 months as the economy reopened and after the Government increased the amount of carbon tax in October’s Budget.

Petrol prices have jumped overall by almost 32% in the 12 months to the end of December, while diesel prices increased nearly 36%.

After transport, higher gas, electricity and home heating bills (11.8%) made the second-largest contribution to inflation over the course of the year.

European wholesale gas prices have skyrocketed in recent months due to a number of factors including a shortage of natural gas.

This has helped to put upward pressure on household bills with several electricity retailers hiking their prices in the early winter months.

Overall, home electricity bills were up 22.4% in the year to the end of December and 1.3% from November.

Alcohol prices, meanwhile, fell by 2.1% in December from November, likely due to the impact of the 8pm curfew for hospitality businesses.