Consumers cut loose as cost-of-living crisis eases

Irish consumers have significantly loosened their purse strings in the past two months in fairly clear evidence an inflation driven cost-of-living crisis has eased at the household level.

AIB’s Spend Trend report for February 2024, based on real spending by account holders, shows the highest-ever airline spend in the first two months of the year.

AIB customers spent more than €210m with airlines in January and February. While it is a traditionally busy time for holiday bookings, that spend was up 10pc on the same period last year to the highest level of spend ever.

Spend in pubs also recorded a big increase in February, up 27pc.

With the Six Nations rugby tournament in full swing, the busiest day for spend in pubs was Saturday, February 24, when ­Ireland beat Wales.

The monthly AIB data was compiled from 67 million debit and credit card transactions in store and online during February 2024, anonymised and aggregated.

While the pace of inflation has eased, the effects are lingering. Less discretionary grocery spending was up 10pc in the month following a steep decline in January.

The AIB data comes after official data yesterday confirmed the slowdown in the pace of inflation.

The Consumer Price Index (CPI) rose by 3.4pc between February 2023 and February 2024, down from an annual increase of 4.1pc in the 12 months to the end of January.

The CPI tends to run higher than the harmonised index of consumer prices (HICP) used by the European Central Bank to track inflation but the trend using either measure shows inflation cooling rapidly.

February was only the fourth time since September 2021 that the annual growth in the CPI has been below 5pc, but the fourth consecutive month.

Big falls in energy costs are driving the trend. Excluding energy and unprocessed food, the CPI went up by 4.6pc in the 12 months to February 2024.

Prices in services sectors, including recreation and culture and restaurants and hotels, are still rising quite sharply. Services costs are heavily influenced by wages, which are continuing to rise, in part to catch up with the inflation of the past two years

Reporting On:independent.ie