The CSO says prices fell by 0.1% in January from the same time last year, the first annual deflation since 1960.

The latest report from the Central Statistics Office shows that consumer prices in January decreased by 1.7% in the month.

The price of clothing and footwear fell by 13.2%; housing, water, electricity, gas and fuel dropped by 7%; and household furnishings and equipment decreased by 2.6%.

The cost of miscellaneous goods and services, health, and alcoholic beverages and tobacco all increased.

Goodbody's Dermot O'Leary said the annual rate of inflation was likely to remain negative for the next 12 months at least. He said that, in January, the main reason for the significant fall in consumer prices was falling mortgage interest costs.

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