PRICES continue to creep up as pent-up demand and pandemic-induced shortages are fuelling inflation.

There was a 1.7pc rise in overall prices in May, according to the latest consumer price index figures from the Central Statistics Office (CSO).

Pent-up demand after months of lockdown saw surge in spending in that month saw hairdressers and non-essential retail operations allowed to re-open.

Inflation is being stoked by rising commodity prices, such as oil, and shortages of goods due to the pandemic, are pushing up prices for Irish shoppers.

Eight energy firms in this market have increased their prices this year, with some of them imposing two price rises.

The rise inflation comes as inflation in the US is coming close to a 28-year high.

Annual Irish inflation in May rose due to an increase in the cost of home heating oil, electricity and gas and higher rents and mortgage interest repayments, the CSO said.

Statisticians said that over the last year it has also recorded higher prices for alcoholic drinks and food consumed in licensed premises, restaurants and cafes.

There was also a rise in the cost of tobacco products and higher prices for wine and spirits sold in supermarkets and off-licences.

Overall price rises have been recorded despite a fall in clothing and footwear prices due to sales.

Food and non-alcoholic beverages costs decreased due to lower prices across a range of products such as meat.

The CSO said that in the year to May furnishings, household equipment and routine household maintenance prices fell.

This was mainly due to lower prices for non-durable household goods and household textiles.

But this decrease was partially offset by an increase in the cost of major household appliances.

The month of May saw higher prices for petrol and diesel and a rise in the cost of cars.

This increase was partially offset by a reduction in airfares.

Motor insurance costs were down 6.5pc in the month when compared with a year ago.

This comes after insurers have benefited from a huge cut in the recommended payouts for minor injuries.

But the cost of home insurance went up by 2.8pc.

And health insurance premiums was up by 2.9pc in the year as all health cost providers have been raising their prices this year.

Meanwhile, there was a spike in spending in May when non-essential retail opened up after months of lockdown.

Consumers spent 10pc more in May than in the previous month, according to the latest Bank of Ireland debit card spending analysis.

The expenditure was on accommodation, transport and retail.

Personal grooming saw a massive uplift in activity, with barber shops and beauty salons reopening their doors on May 10.

Spending on social activities was up by 13pc in May, with the data revealing that social spending overall now stands at just 1pc lower than it was prior to the onset of Covid-19. Restaurant spending rose in May by 22pc, as “dine-at-home” options continued to grow in popularity.

Spending on fast-food options also grew by 22pc, and bars had a healthy level of business despite indoor service remaining closed, with a 40pc monthly rise.