Food prices in Ireland are rising at three times the rate of overall inflation, figures from the Central Statistics Office (CSO) show.
The agency’s latest harmonised index of consumer prices (HICP) for Ireland indicated that the cost of basic groceries rose by 0.2 per cent in July and at a rate of 4.6 per cent over the last 12 months.
This compares to an annual inflation rate for the wider economy of 1.6 per cent in July, unchanged from the previous month.
The latest figures broadly tally with the latest barometer on grocery inflation from retail group Kantar.
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It put grocery inflation at 5.3 per cent for the 12 weeks up to the middle of June compared to the same 12-week period last year. Kantar also noted that Irish shoppers were increasingly spending more on promotional lines to save money in the face of rising prices.
A breakdown of the various components of the latest HICP showed energy prices here grew by 1.5 per cent in July but were down by 0.3 per cent over the past year.
The HICP excluding energy and unprocessed food, the underlying inflation rate, is estimated to have grown by 1.7 per cent since July 2024, the CSO said.
Eurostat will publish a flash estimate of inflation for the euro zone as a whole on Friday.
The European Central Bank (ECB) paused a year-long cycle of interest rate cuts last week with price growth easing to its 2 per cent target rate in June and amid the economic uncertainty from US tariffs.
“The environment remains exceptionally uncertain, especially because of trade disputes,” the euro zone’s central bank said while offering few hints as to its next move.
Euro zone inflation likely remained around 2 per cent in July, according to various national indices, keeping pressure off policymakers to cut interest rates further.
Inflation in Germany eased to 1.8 per cent from 2 per cent, coming below expectations for 1.9 per cent while figures in Italy eased to 1.7 per cent from 1.8 per cent, above expectations for 1.6 per cent.
Price growth in France was meanwhile unchanged at 0.9 per cent, above expectations for 0.8 per cent while Spanish inflation jumped to 2.7 per cent from 2.3 per cent.
“Today’s national preliminary CPI readings for July, combined with strong Spanish inflation published yesterday, signal that the euro zone is likely to track at the ECB target of 2 per cent this month,” Oxford Economics said in a note.
ECB policymakers are also likely to refrain from further rate cuts until they gain more clarity on how US protectionism is impacting prices.
Tariffs, imposed by US president Donald Trump on US imports, are expected to weigh on euro zone prices for now since they slow global trade and economic growth.
Additional reporting by Reuters
