The latest inflation figures for Ireland, taken using the EU measure, show another welcome fall in the annual rate in July to 4.6 per cent, from 4.8 per cent the previous month. Because of the way it is calculated, specifically in relation to housing, the more traditional consumer price index will show a higher rate when it is published, though it too is falling.
The easing of inflationary pressures is welcome and should continue, assuming that wholesale energy prices do not start to head higher again. While the reasons for the timing of changes in retail prices in the energy market remain opaque, this fall in wholesale prices should start to be passed on shortly by energy companies to consumers. There can surely not be much further reason for delay.
Government plans to include some energy supports for households and businesses in the budget suggest that Ministers believe reductions for customers will be slow enough. But if wholesale prices remain at current levels, we should expect a consistent, if gradual, decline.
The price of food too looks to be levelling off and, in some cases, falling; it is still 8.6 per cent ahead of last year. Competition in the grocery market should, we must hope, see better deals for grocery shoppers in the months ahead.
Odesa Letter: ‘Unbroken Women’ overcome dreadful conditions to care for children with severe disabilities
Why weather forecasts in Ireland and across the world are about to get more accurate
Koda restaurant review: It’s easy to see why this south Dublin spot is becoming a neighbourhood favourite
Damien Dempsey: Hold Your Joy – An infectiously wholehearted approach to singing and storytelling
The bigger challenge may be ending the wider inflationary psychology which has taken hold in many areas. The easing of energy input prices for businesses in the months ahead should allow savings to be passed on to consumers more generally. A concern in services businesses in particular is that higher staff costs will keep inflation high in this area.
The Government has an important role here. It needs to take care in the additional costs it imposes on businesses. State companies have an important role to play in their own dealings with customers. And in everything from budget policy to striking a new public sector pay deal, the Government needs to consider the impact of its actions on the key goal of getting inflation down, which in turn will help to boost real living standards.