The annual rate of inflation fell from 5.6% in April to 5.4% in May as acceleration in food prices began to taper off. The figure was in line with expectations.
The Consumer Price Index rose by 0.6% in May to bring the overall index to 116.1, according to the latest figures from the Central Statistics Office. This compares with a monthly increase of 0.7% in May of last year.
The most significant monthly price changes were increases in housing, transport, food, services and related expenditure and fuel and light. Food was up 0.6% after a 1.4% rise in April.
The most notable changes during the year were increases in housing, food, fuel and light, alcoholic drink, other goods and a decrease in clothing and footwear.
'Although the vagaries of food and energy prices argue for caution, we have now probably passed the peak for inflation this year,' Austin Hughes, Chief Economist at IIB Bank, said. 'But we expect downward progress to be unsteady. Inflation will likely average round 4.8% for the year as a whole'.
Mr Hughes said the drop in inflation last month was also facilitated by stable drink and tobacco prices, categories which saw sharp increases a year earlier.
He said that he expects that the bulk of the impact of from BSE and foot and mouth problems are behind us. However, he warns that increases in electricity prices and television licences, suggest that the prospective drop in inflation may not be dramatic.
The EU Harmonised Index of Consumer Prices rose to 115.9, up 0.6% in the month and by 4.1% in the 12 months since May 2000.
