Inflation edges up as heating oil price jumps

High housing costs and soaring petrol prices have accelerated the Austrian inflation rate.Statistik Austria announced today (Fri) that inflation in Austria rose by 0.2 per cent to 1.9 per cent in September compared to the same month of last year.The statistics body explained high car maintenance costs and rising fuel prices as well as expensive housing avoided a decline of the rate.Costs for housing energy rose by 3.4 per cent year on year due to a 22 per cent increase of heating oil price rates, while electricity was only one per cent more expensive last month than in September 2009. The price for heating gas even declined by 4.3 per cent year on year. Flat maintenance costs rose by 2.8 per cent, while rent rates increased by an average 3.6 per cent.A recent study by the Lower Austrian energy consulting body showed that heating a 20-year-old family house with oil cost an average 1,820 Euros a year, while using chopped wood cost only 810 Euros. The study also found thermal pump heating cost an annual 1,020 Euros, while pellet heating caused costs of 1,210 Euros.Car fuel prices increased by 11 per cent year on year. Yet European surveys have shown that car petrol was comparably cheap in Austria. Tens of thousands of motorists cross the border every year just to fuel their cars in Austria where one litre of regular car petrol is taxed with 44.2 Eurocents.Car repair costs were four per cent more expensive last month than in September 2009. The average price for a new car edged up year on year by 1.3 per cent, while flight tickets were 14 per cent cheaper.Restaurants and hotels slashed their prices by two per cent year on year last month. Online hotel comparison platform Trivago announced just a few days ago that a standard double room in Austria cost 115 Euros per night this month, up by three per cent compared to last month.Shoes were six per cent more expensive, while prices for products of the clothes and shoes group soared by 11.3 per cent year on year last month.Reinhard Backhausen, head of the Austrian Industrial Association for Textiles, Clothes, Shoes and Leather (TBSL), warned recently customers must brace themselves for soaring clothes prices.Backhausen said he expected prices in shops to rise due to higher cotton trade rates following dramatic crop shortages. Backhausen stressed that cotton prices rose by 70 to 80 per cent during the past 12 month following “massive demand from China”. He called the situation “worrying”, adding that final prices could rise by five per cent depending on the distributors.Joseph Lorenz, head of the TBSLÂ’s shoe and leather products department, said he expected leather prices to jump by 10 per cent following developments on the global trade market.The average year on year inflation in the European Union (EU) rose by 0.2 per cent from August 2010 to the next month. Romania had the highest inflation rate among the EU-27 with 7.7 per cent, followed by Greece (5.7 per cent).The inflation in the Eurozone, the 16 EU member states which have adopted the Euro as their sole currency, was 1.8 per cent last month, up from 1.6 per cent in August of this year.