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THE COST OF LIVING in the Eurozone rose by 2.2 per cent in 2012 – the lowest rate of inflation for several months – according to new figures published this morning.
Eurostat’s data showed that the EU’s Harmonised Index of Consumer Prices rose by an estimated 2.2 per cent in the twelve months ending in December, the same figure as had been given for the year ending in November.
The drop in the last few months is relatively stark; inflation had stood at 2.6 per cent in the year ending August and September, and at 2.5 per cent in October.
Food prices rose by 3.1 per cent in 2012, while energy prices were up by 5.2 per cent. Prices of non-energy industrial goods was up by 1.1 per cent, while the price of services rose by 1.1 per cent.
The inflation rate is significantly higher than in Ireland, where the most recent figures – for November – showed the HICP as having risen only by 1.6 per cent in the 12 months up to then.
The Consumer Price Index, the CSO’s own preferred measure of inflation, showed an annual increase of 0.8 per cent at that time.
The falling rate of inflation could encourage the European Central Bank to reduce interest rates at its first meeting of 2013, to be held next Thursday in Frankfurt.
The ECB usually interprets its mandate – as ensuring price stability – to mean that inflation would ideally be held at 2 per cent.
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How much has the cost of living increased in Ireland since 2006? Does anyone know? Would be interesting to see this in the context of job losses & wage cuts. Our labour force is taking the brunt of the last six budgets to ‘improve competitiveness’ which is code for ‘make them poorer’. This is sadly not a conspiracy theory, it’s simply austerity.
Rubbish.
Higher prices mean people will demand less not more.
If you wanna increase “consumer spending” why not lower the cost?
I’m tired of this type of demagoguery.
Since 2006:
2006: 3.9%
2007: 4.9%
2008: 4.1%
2009: -4.5%
2010: -1.6%
2011: 2.6%
Thanks Gavan, I appreciate that. This trend allied with pay cuts & increased taxes explains in stark numbers why so many are struggling to make ends meet. Something has gotta give.
Almost 12% since 2006 and recall that should be compounded, so it’s actually more.
And these are fudged govt numbers, no doubt.
“All fiat currencies return to their intrinsic value — zero” – Voltaire
If debt remains the same in relaton to the rate of inflation then in effect it shrinks the debt. Considering the countrys massive level if indebtness inflation may allow us to outgrow our debts. Low levels of inflation actually plays in to the hands of the likes of Germany by keeping their cost base artificially low making it more competitiive in markets like China Etc.
But Keith, at the cost of who? The poor and the old?
The cost of those about to retire as they see the value of their funds decline in relation to living costs and those with savings.
@Michael: Compounded, the interest rate between 1/1/2006 and 31/12/2011 is 9.39%.
That is to say, the average product that cost €100 at the start of 2006 cost €109.39 at the end of 2011.
And this year brings it to…111.80?
That means purchasing power (and savings) has been reduced by a little more than 10% in 6 years.
10% increase in the price of food, fuel and commodities? What planet are they on???
“You can fool some people all of the time, all of the people some of the time, but you can’t fool all of the people all of the time”
This system has to stop.
Best image caption ever Gavin!!
Why do we continue to squeeze the poor and middle class with inflation? 2.2% is high. What is wrong with deflation? Give the people on fixed incomes a chance? Lower prices of basic commodities? Relieve the pressure on gold?
Thus love of inflation makes me sick. Stop the money printing to afford these entitlements. Balance the budget.
Bring back sanity? Not Keynesian NONSENSE.
We already have one of the most expensive electricity and gas prices range from 30-45% higher than Europe.internet Broadband is amongst the most expensive monthly and slowest broadband to most European countries.ready to go top ups also the most expensive with the least amount of minutes.car prices 30% higher than other EURO countries.all of these major factors added to higher transport cost of public and private usage and we could really see how much we’re being screwed by a government and Europe.
Those who own the printing presses use inflation to keep the citizens enslaved in debt, too busy to ask questions like who owns the Federal Reserve bank in America.
have your say