Dáil Éireann Debate, Thursday - 18 December 2025
179. Deputy Aindrias Moynihan asked the Tánaiste and Minister for Finance the up-to-date statistics on inflation in Ireland, specifically with regard to essential goods and services; the steps being taken to address continuing rising living costs; and if he will make a statement on the matter. [73065/25]
Amharc ar fhreagraSignificant support to households and businesses has been provided over the last four years to help absorb the worst impact of higher prices.
The temporary nature of these supports balanced the need to provide assistance to the most vulnerable while, at the same time avoiding a scenario wherein fiscal policy added to inflationary pressures in the economy.
Budget 2026 strikes an appropriate balance between increasing investment and moderating the growth in day-to-day spending whilst avoiding doing anything that has such a cost that it in turn could create other difficulties for us in the time ahead.
After fluctuating at rates of around 2% in the first eight months of the year, annual inflation accelerated in September and, subsequently, breached the 3% rate in November (when the annual rate of CPI inflation reached 3.2%).
Importantly, the Central Statistics Office has noted that the elevated annual inflation rate seen since September has reflected, in-part, so-called 'base effects' arising from the very weak readings recorded in autumn last year.
Inflation in the broad services sector has been the primary driver of inflation this year. Prices for many services are usually related to the strength of domestic economic conditions, including in the labour market.
In general, energy prices have reduced overall inflation this year. More recently, however, energy prices have boosted the headline rate of inflation, reflecting higher prices for fuel and electricity. In November, the annual energy inflation stood at 3.3%.
Food price inflation has been an important contributor to inflation this year, with an annual food price inflation rate of 4.2% in November. Much of this increase has been due to higher prices for agricultural commodities. Reflecting this, the recent rise in food prices has been concentrated in three categories: meats, oils and fats, and confectionary.
Government is all too aware of the impact inflation has placed on businesses and households over recent years. Government acted swiftly and decisively to mitigate the impact of rising prices.
Budget 2026 pivoted from temporary ‘once-off’ measures towards more permanent and sustainable measures, targeted at the most vulnerable in our society.
In this context, the Budget provided several measures for households, including a €10 increase in weekly social protection payments, including for pensioners, people with disabilities, carers, jobseekers and lone parents.
For families, these measures include increasing the Working Family Payment income thresholds by €60 per week for all families and an increase in the weekly Child Support Payment rates by €8 for children under 12 and by €16 for children over 12.
All households will benefit from the extension of the reduced rate of VAT on electricity and gas until the end of 2030.
For renters, Budget 2026 extended the rent tax credit for a further three years. This has proven to be a very meaningful support for renters, with almost 400,000 people benefitting from it in 2023.
Finally, it is also important to point out that, on average, wages increases are in excess of price increases. This will help support the purchasing power of households over the coming period.
