Renters and younger people hit harder by inflation, new CSO data shows

Households led by younger people and those who are renting their homes are experiencing higher levels of inflation, new research indicates.Central Statistics Office (CSO) figures show households headed by a person aged under 35 experienced an inflation rate of 4.4 per cent in September, “the highest of all the categories examined”. The headline rate for the country as a whole in September was 4.1 per cent.Households renting were also found to be experiencing a higher rate of inflation, estimated at 4.3 per cent compared with a rate of 4.1 per cent for households paying a mortgage, while it was 3.7 per cent for households that owned their home outright.READ MOREThe disparity in how households experience inflation stems from the fact that lower-income households spend a higher proportion of their income on energy and rent.“Each household has its own unique consumption pattern of goods and services and therefore its own personal experience of inflation,” the CSO’s Edel Flannery said.The main drivers of inflation in the 12 months to September for lower income households were electricity, gas and other fuels, followed by rent and transport costs, the agency said For higher earners, it was transport and restaurants and accommodation services costs, which includes hotels, bar sales, and takeaway food and coffees.The CSO’s analysis showed that for the lowest 25 per cent of households by income, electricity, gas and other fuels, including home heating oil, was the largest contributor to their estimated inflation rate at 1.1 per cent of 4.2 per cent, followed by rent and transport at 0.8 percentage points each. For top-earning households, restaurants and accommodation services and transport were the largest contributors to their estimated inflation (both 0.8 percentage points of 4.1 per cent).The European Central Bank (ECB) has raised interest rates twice in the last four months, but it is expected to hold fire when it meets later this week, keeping rates unchanged.