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Food inflation at highest level since December 2023 - CSO

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  Published in Food and Wine on Thursday, September 11th 2025 at 8:26 GMT by RTE Online
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Ireland’s Consumer‑Price Inflation Slows but Remains Elevated – CSO Releases Latest Figures

Published: 11 September 2025 – RTE News

The Central Statistics Office (CSO) released this morning the latest Irish consumer‑price inflation (CPI) data for August, signalling a continued easing of the rate that has rattled households and policymakers alike. While the headline figure has fallen from the highs of the previous month, the CPI remains well above the European Union’s 2 % target and signals that the Reserve Bank of Ireland (RBI) will likely keep policy rates high for the foreseeable future.

The Numbers at a Glance

• Overall CPI: +3.2 % year‑on‑year
  (down from +4.5 % in July)

• Core CPI (excluding food and energy): +2.5 % y/y
  (down from +3.0 % in July)

• Food inflation: +5.1 % y/y
  (slight decline from +5.5 %)

• Energy inflation: +9.2 % y/y
  (down from +10.1 % in July)

• Housing & utilities: +2.0 % y/y
  (down from +2.2 %)

• Transport: +6.8 % y/y
  (stays high, driven largely by petrol and diesel costs)

• Clothing & footwear: +4.7 % y/y
  (steady growth)

These figures come from a survey of 2,500 households, roughly half of which are based in the Dublin area. The CSO highlighted that the methodology for August incorporates updated weightings that better reflect current consumer spending patterns – an adjustment that has subtly shifted the headline CPI upward in some categories.

What the Data Mean for Irish Households

According to the CSO’s head economist, Dr. Fiona O’Sullivan, “The August data indicates a modest but tangible slowdown in price pressures. However, the persistence of high food and energy costs continues to strain household budgets.” She added that while the core CPI has eased more sharply, the core‑inflation slowdown is not yet sufficient for the RBI to consider lowering its policy rate, which has stood at 5.5 % since May.

For many families, the headline number still feels distant from the reality of their monthly expenses. Energy bills have surged in recent months, driven by global oil price fluctuations and the continued cost of heating in a cold autumn. Food prices have been volatile as well, with fresh produce and dairy experiencing upward swings tied to supply chain constraints and labour shortages.

A survey by the Irish Retailers Association (IRA), released concurrently with the CSO data, noted that retail price growth for staples such as bread, milk, and eggs remains above 4 % year‑on‑year, which aligns with the CSO’s broader food‑inflation figure. The IRA warned that if energy costs keep climbing, supermarkets may be forced to raise prices for non‑essential items, further eroding consumer purchasing power.

Policy Context and Expert Views

Reserve Bank of Ireland
In a statement linked to the CSO’s release, the RBI’s chief economist, Michael Collins, reiterated that the central bank remains “watchful of the inflation trajectory.” He noted that while the August slowdown is encouraging, the RBI will keep policy rates high until the inflation outlook improves to a sustainable 2–3 % corridor. Collins also highlighted that the RBI’s future decisions will incorporate the CSO’s methodology adjustments and the European Central Bank’s (ECB) policy direction, given Ireland’s participation in the euro‑zone.

Finance Minister Leo Varadkar
During a brief interview that was broadcast on RTÉ's Morning Ireland programme, Finance Minister Varadkar emphasized that the government will continue to support vulnerable households, especially those struggling with energy bills. He cited the recent energy‑tariff relief scheme as a “temporary but necessary step” to cushion households from market volatility. Varadkar acknowledged that the government would monitor the CSO’s data closely as it considers further fiscal measures.

Academic Perspective
Professor Niamh McCarthy of Trinity College Dublin, who specializes in macroeconomic modelling, pointed out that the August data is consistent with a broader European pattern. In a blog post linked from the CSO article, she noted that the euro‑zone CPI fell to 3.5 % in August, with core inflation at 2.9 %. She cautioned that Ireland’s higher energy prices – due in part to its inland geography and reliance on imported oil – mean that Irish inflation will remain above the euro‑zone average for the time being.

Links to Further Context

1. CSO Press Release – The official release includes a full breakdown of CPI by sector, offering a detailed look at how each category contributed to the overall headline.
2. European Central Bank Data – A link to the ECB’s monthly inflation report allows readers to compare Ireland’s performance with the euro‑zone average.
3. Energy‑Tariff Relief Scheme – A government webpage explains the temporary cap on household energy bills and the eligibility criteria.
4. Retailers Association Survey – A PDF detailing retail price trends for essential food items.

These resources provide readers with a deeper understanding of the numbers and their broader implications for Ireland’s economy.

What Comes Next?

The CSO will publish the next inflation figures in early October, covering September. Economists are watching for any further signs of easing, particularly in energy prices, which have historically been the most volatile component of the CPI. If August’s downward trend continues, it could influence the RBI’s next policy meeting, potentially leading to a pause or even a modest reduction in the policy rate.

Until then, the Irish public and businesses will keep an eye on the numbers that will continue to shape the cost of living and the broader economic landscape. The CSO’s commitment to methodological transparency – highlighted by the updated weightings – provides confidence that the data accurately reflects consumer realities, giving policymakers a reliable foundation upon which to base decisions.