Tom Kitt (Dublin South, Fianna Fail)

The latest consumer price index, CPI, publication refers to August 2006 when the annual rate of inflation was estimated at 4.5%, compared with 4.2% in July and 2.3% in August 2005. The current annual rates of over 4% are the highest recorded since early 2003 and are significantly higher than the average annual rates of 2.5% and 2.2% recorded in 2005 and 2004 respectively.

The most notable contributing changes in the year to August 2006 were increases in housing, water, electricity, gas and other fuels, up 16.9%, transport, up 5.2%, education, up 4.7%, restaurants and hotels, up 4.3% and health, up4.1%. Clothing and footwear fell by 3.6% and furnishings, household equipment and routine household maintenance fell by 1.2%.

The annual rate of inflation for goods was 1.7% in August while the corresponding rate for services was 7%.

The annual rate of inflation in August, as measured by the EU harmonised index of consumer prices, HICP, rose to 3.2% in August, up from 2.9% in July and 2.1% in August 2005. The differences between the CPI and HICP mainly reflect the exclusion of mortgage interest costs from the latter. Using the HICP, the overall annual rate of inflation for both Economic and Monetary Union, EMU, countries and the EU as a whole in August was 2.3%.

See this speech in context