Annual Rate Of Inflation Falls Slightly To 5% Despite Small Monthly Increase

Consumer Prices in May, increased by 0.4% in the month.

This is the same monthly increase as recorded in May of last year.

The annual rate of inflation fell slightly to 5.0%, down from 5.1% in April.

The EU Harmonised Index of Consumer Prices (HICP) increased by 0.3% in the month, compared to an increase of 0.5% in May 2006. The annual rate of inflation, as measured by the HICP, decreased from 2.9% in April to 2.7% in May.

The most notable changes in the year were increases in Housing, Water, Electricity, Gas & Other Fuels (+22.6%), Alcoholic Beverages & Tobacco (+5.4%), Restaurants & Hotels (+4.9%), Education (+4.8%) and Health (+2.8%).

There were decreases in Clothing & Footwear (-3.1%) and Furnishings, Household Equipment & Routine Household Maintenance (-2.0%).

The annual rate of inflation for Services was 9.1% in May, while Goods increased by 0.3% in the year.

The most significant monthly price changes were increases in Housing, Water, Electricity, Gas & Other Fuels (+0.7%), Restaurants & Hotels (+0.6%), Food & Non-Alcoholic Beverages (+0.6%) and Clothing & Footwear (+0.6%). The main factors contributing to the monthly change were as follows:

• Housing, Water, Electricity, Gas & Other Fuels costs increased with higher average mortgage interest repayments and rents.
• Restaurants & Hotels rose with higher prices for eating&drinking out and accommodation services.
• Food & Non-Alcoholic Beverages rose with increases across a range of products including lamb, potatoes, other bakery products and beef.
• Clothing & Footwear prices increased with higher prices for both clothing and footwear.

The CPI excluding tobacco index for May was up 0.4% in the month and up 4.7% in the year. The CPI excluding energy products index was up 0.2% since April and increased by 5.1% in the year. The CPI excluding mortgage interest increased by 0.4% in the month and rose by 2.6% in the year.