I welcome today’s news that the Consumer Price Index (CPI) has declined by 0.4% in November. The decline of 0.4%, from October to November, according to statistics just released by the Central Statistics Office, is positive news for consumers. This means that the annual rate in the rise of CPI now stands at just 0.8%, its lowest level since November 2010. This is good news for consumers, as it shows a fall in prices across several sectors, such as transport (-1.9% month on month), restaurants and hotels (-0.7% from October).
These statistics, brought to my attention by Philip O’Sullivan, the Chief Economist at NCB Stockbrokers, are a welcome revelation and runs counter to a lot of uninformed commentary in certain quarters.
All of the restaurant and hotel drop can be attributed to the drop in the price of accommodation, with restaurants registering a slight rise. Nevertheless, I believe the sector benefits from the continuation of the VAT reduction, which has been guaranteed through 2013 in the most recent budget. This is a measure which will have a positive impact on both the confidence and the competitiveness within this sector.
In addition, transport prices fell during the month as a consequence of a reduction in the price of petrol and diesel.
All in all, this is positive news, with the CPI having fallen in 5 of the last 6 months, this shows further respite for consumers.