So the headline figure is: +0.5% yoy gain in CPI and -1.0% yoy loss in HICP. Mixed bag, you'd say. By one measure (CPI) it looks like things are getting back to a (positive) normal, while by HICP reading we are still in the (crisis) normal.
But let's take a closer look at decomposition of price changes. Per CSO, the most notable changes in the year were:
- increases in Education (+9.5%),
- increases in Housing, Water, Electricity, Gas & Other Fuels (+8.5%) and Communications (+2.9%) [Note: monthly CPI ex mortgage interest decreased by 0.2% in the month and was down by 0.9% in the year], and
- decreases in Clothing & Footwear (-7.4%), Furnishings, Household Equipment & Routine Household Maintenance (-3.7%) and Alcoholic Beverages & Tobacco (-3.1%).
The most significant monthly price changes were:
- decreases in Transport (-1.6%) - driven by airfares drop (not by the state-controlled bus and train fares, mind you) and
- decreases in Miscellaneous Goods &Services (-0.4%) - primarily due to cuts in health insurance charges;
- increase in Clothing & Footwear (+4.5%).
So good news then is that:
- State services, such as Education (+9.5% ! in 12 months);
- Banks payback to consumers for propping them up (CPI is up +0.5% yoy and ex-mortgages CPI is down -0.9% over the same period. So far, we have had, courtesy of our banks rescue plans: in a year to September 2009 mortgages costs fell 48%, in a year to September 2010 they rose 25.1%. All despite the fact that Irish banks are no longer facing higher costs of funding - instead they are simply borrowing from ECB using our bonds, for which you, me and our kids will be liable);
- State-set charges on energy (+8% yoy);
- State set health costs (+0.5%);
- Largely state-set or influenced transport costs (+1.4%)
Clearly, we've turned another corner, folks, and it's the 'Ugly Boulevard' ahead of us, consumers.