This morning, Ireland’s Central Statistics Office (CSO) has released its inflation figures for February 2013. The monthly headline Consumer Price Index (CPI) increased by 0.8% compared to January 2013, but is still only up a modest 1.1% year-on-year. February’s results mirror those of December, November, October and September, and continue a subdued annual inflation trend seen in recent months compared with the 2%+ that pertained before January 2011.
Housing has stopped being the biggest driver of annual inflation, mostly because mortgage costs have been declining – by 7.0% in the past year, as ECB rate cuts and greater scrutiny of variable mortgage interest rates take effect. Just a few months ago, mortgage interest was rising by 20% per annum, and as mortgage interest costs account for over 5% of the basket which measures inflation, the impact on inflation was substantial.
Energy costs in homes on the other hand, which account for over 5% of the total basket examined by the CSO, have risen by 6.9% in the past 12 months, mostly driven by the 9% price hikes at the ESB, and in October 2012 at Bord Gais.
Elsewhere, private rents rose by 0.2% in the month of February 2013 – this after a 0.1% increase in January 2013 but bigger increases in previous months: 0.7% in December, 0.6% in November, 0.7% in October and 0.9% in September 2012. Over the past year, such rents are up by 2.2% according to the CSO – there is some small rounding in the figures above which show 2.4%.
It seems that in our financial crisis, the big correction in rent took place in 2009 with a 19% maximum decline, compared to a decline of just 1.4% for all of 2010. Since the start of 2011 there has been a 6.9% increase (mostly recorded in February and October 2011 and February and September/October/November 2012).
Rent assistance levels have not been affected by the recent Budget 2013, neither the rates nor contribution have changed.