Counting the cost of living increases...

WE hear a lot about prices and inflation at the moment but how is it calculated?

The consumer price index (CPI) is the main indicator of inflation and is compiled by the Central Statistics Office (CSO).

Over 50,000 items are tracked periodically for their prices and like-for-like items are priced across all categories like groceries, alcohol, utilities, fuel and even air fares.

New items, like streaming services, get added according to their popularity, and things like disposable cameras and clock radios (remember them?) get removed as they go out of use.

To put some figures on the pain as we feel it in our wallets, prices were on average 5.5% higher in the year to December 2021 (which in turn was the highest yearly hike in 20 years). As we know only too well, the prices of some items went stratospheric. Car fuel prices for petrol and diesel went up 35% and over 37% respectively in the last 12 months. Running a car is now €600 more expensive on average this year than last year.

The CSO figures are used to inform decisions on social welfare, pensions and even wage negotiations. For example, if your pension had not increased by 5.5% in the last year in line with the CPI price rises, theoretically you are able to buy less with it, leading to hardship.

Those savvy shoppers amongst you may want to take a look at the average price of the day to day items so you can see if your own store or supplier is taking the mickey or not: Gent’s dry cut is €17.28, cinema ticket €10.23, pint of stout €4.94, box of 80 teabags €2.75, lb of butter €3.14, 2 litres of milk €1.68. Visit www.cso.ie for tons of information on this.

They even provide a calculator to show the increase in consumer prices over the year.

I learned that a €100 basket of goods the year of my birth would have cost me €1,313 last month. Very interesting...