Inflation dips – but only temporarily

Inflation, as measured by the Consumer price index, stands at 8.1% for May 2022, down from 9.0% in April 2022.

This apparent decrease in the rate of inflation compared with the previous month is likely a consequence of a jump in inflation between April and May 2021 and relatively little change in prices overall between April and May of this year. For this reason, and given the economic lookout, it is probable that this decrease represents only a temporary lull in rising inflation rather than signalling the beginning of a downward trend.

The category ‘Transport’ remains the largest contributor to the rate of inflation, providing a 3.9% increase in the overall 12-month rate, followed by ‘Housing, water, electricity, gas and other fuels’ a 2.3% increase. Five items within the ‘Transport’ category show significant increases. ‘Petrol and Oil’ experienced the biggest increase in prices (35.5%) followed by ‘Other Travel costs’ (29.6%) and ‘Purchase of motor vehicles’ (14.1%). Within ‘Housing, water, electricity, gas and other fuels’, ‘Oils and other fuels’ experienced the biggest increase in prices (96.8%) compared to the same month last year.