Recent controversy over the cost of motor insurance is set to continue as new figures show motorists paid 35.2 per cent more in May compared with the same month last year.
Fianna Fáil has called for the setting up of a taskforce on the matter, while the insurance industry has denied that a lack of transparency on its part is driving up premiums. It has instead cited factors such as high legal costs and the collapse of Setanta Insurance.
The consumer price index, published on Thursday by the Central Statistics Office (CSO), also shows the cost rose 1 per cent in May compared with April.
Elsewhere, the most notable changes in the year were increases in miscellaneous goods and services, which rose 5.6 per cent; education, which rose by 3.8 per cent; restaurants and hotels which rose by 2.1 per cent; and health, which rose by 1.6 per cent.
In terms of the decreases, transport fell by 5.3 per cent; furnishings, household equipment and routine household maintenance was down 3.1 per cent; communications fell 1.2 per cent, and food and non-alcoholic beverages fell 1.1 per cent.
Overall consumer prices increased by 0.5 per cent in the month. The headline annual inflation rate was zero as against -0.1 per cent in April.
The CSO said the main factor that contributed to the year-on-year rise in the miscellaneous goods and services category was higher home, motor and health insurance premiums.
In the restaurants and hotels category, it said prices rose in the month and in the year due to an increase in the cost of hotel accommodation, as well as higher prices for alcoholic drinks and food consumed in licensed premises, restaurants, and cafes.
The cost of education increased “mainly due to the extra costs associated with participating in third level education”.
The CSO also noted that the cost of transport fell both in the month and the year mainly due to lower petrol and diesel prices, a reduction in the price of motor cars, and a fall in air fares.
In terms of furnishings, household equipment and routine household maintenance, it said the decrease was primarily due to a drop in the cost of furniture and furnishings, non-durable household goods, and household textiles.
Food and non-alcoholic beverages decreased mainly due to lower prices across a range of products such as meat, chocolate, confectionery, milk, cheese, eggs, bread, and cereals, which were partially offset by higher prices for potatoes.
In the month, alcoholic beverages and tobacco fell primarily due to lower prices for wine sold in supermarkets and off licences.
Alan McQuaid, an economist with Merrion Stockbrokers, said the figures were “a touch stronger than expected” but showed overall inflationary pressures were “still very weak”.
“The main monthly changes in May were increases in petrol and diesel prices, air fares and hotel accommodation,” he said. “Against that, the price of wine sold in supermarkets and off-licences was lower than in April.
“Despite the booming Irish economy, inflationary pressures are in our view likely to remain fairly well contained in the immediate future, mainly because of low food and energy prices.”
He added that the cost of services like insurance and education “look set to continue to rise”.
ISME chief executive Mark Fielding said recent fluctuations in currency markets demonstrate “the vulnerability of the economy to any external shocks” and that high costs must be reduced.
“It is imperative that both the public and private sectors manage the controllable costs and drive efficiencies and productivity,” he said. “This will leave the country less dependent on external factors and make our recovery more sustainable.
“High costs have implications for the cost of living, with Irish consumer prices 20 per cent above the euro-area average, which drive wage demands. It is vital that we continue the fight against high costs which are not justified.”
