Inflation topped 9% in June, the highest level in almost four decades, with the recent hike in food prices adding to the latest spike in costs.

Central Statistics Office (CSO) figures show that the Consumer Price Index (CPI) in the year to the end of June was up 9.1%. This is the highest annual rate of increase since Q2 in 1984.

Consumer prices rose by 1.3% from May to June this year, with transport and food the main drivers of this increase. Transport costs rose by 5.1%, while food and non-alcoholic beverages were up by 2.3%.

Housing, water, electricity, gas and other fuels rose by 1.3% in the month from May to June, while the cost of hotel accommodation and restaurant meals increased by a similar level.

The most significant increases in the year to June 2022 were seen in housing, water, electricity, gas and other fuels which was up 22.5%, and transport, up 20.4%

The CSO identified higher food prices as a key component of the overall increase in the CPI. For example, the average cost of a white sliced pan (800g) rose 13.9c in the year to May 2022, while a brown sliced pan was 16.1c dearer. Spaghetti per 500g increased by 18.3c in the year. However, the average price for 2.5kg of potatoes decreased by 19.3c.

Commenting on CPI changes, Anthony Dawson, statistician in the CSO prices division, explained that prices have been rising since April 2021, with an annual inflation of 5.0% or more recorded each month since October 2021.

“The most significant increases in the year to June 2022 were seen in housing, water, electricity, gas and other fuels, which were up 22.5%, and transport, up 20.4%,” Dawson said.

He pointed out that electricity costs rose by 40.9% this year, with gas up 57.2% and home heating oil 115.4% dearer.

Worryingly, agricultural output prices are not keeping pace with the increased cost of inputs

“The annual change in transport costs reflects a rise in the cost of diesel (+50.7%), petrol (+43.8%), purchase of motor cars (+13.0%) and airfares (+38.4%) compared to June 2021,” Dawson pointed out.

Figures from the CSO show that the agricultural input price index was up by 41.6% in the year from May 2021.

The latest data shows that fertiliser prices rose by 164% in the 12 months to the end of May, energy prices increased by 50.5% and in feed prices were up 32.6%.

Worryingly, agricultural output prices are not keeping pace with the increased cost of inputs, despite the higher returns recorded for milk, grain and livestock over the last year.

The CSO data shows that the agricultural output price index rose by 28.0% in the 12 months to the end of May. This is 13% below the input price index.