The annual rate of inflation fell slightly to 2.5% in September, down from 2.6% in August, according to the latest figures from the Central Statistics Office today.
The CSO said that consumer prices increased by 0.1% in September. This compares to a rise of 0.2% in September last year, and as a result, the annual rate of inflation fell last month.
The price of clothing and footwear rose by 3.2% in September as the summer sales came to an end. Housing, water, electricity, gas and other fuels were up by 0.8% after increases in average mortgage interest repayments and home heating oil prices.
Miscellaneous goods and services fell 0.8% last month as the cost of motor insurance fell. However, this was partially offset by an increase in the cost of health insurance
Transport also fell 0.4% with decreasing air costs, petrol prices and boat fares. These decreases were offset, however, by rising prices for diesel and cars, the CSO said.
On an annual basis, the CSO said there was a 6.6% increase in housing, water, electricity, gas and other fuels prices, while education was up 6% and health costs rose by 5.4%. Transport costs rose by 5.2%, with prices in restaurants and hotels up by 4.5%. The price of alcohol and tobacco also rose by 3.7%.
There were decreases in annual clothing and footwear prices, down 2.8%, while prices of furnishings, household equipment and routine household maintenance also fell by 2.4%. The cost of miscellaneous goods and services was also lower, down 1.6%.
The CSO said the EU Harmonised Index of Consumer Prices also increased by 0.1% in September. This compares to an increase of 0.2% the same time last year, and as a result, the annual rate of inflation - as measured by the HICP - fell to 2.4% from 2.5% in August.
The annual inflation rate also fell in August to 2.6% from 2.7% in July.
IIB economist Austin Hughes said a surprise drop in petrol prices and lower motor insurance led to the drop, but he predicted that high oil prices would push the rate to near 3% by the end of the year.
He added that, apart from energy costs, there were few signs of any significant acceleration in price pressures.
Davy Stockbrokers also said the annual inflation rate in December would top 3% as further energy cost
increases - including another hike in electricity prices - fed through.
Bank of Ireland's Dan McLaughlin said the Irish rate was now very close to the euro zone average. Though he also expects a 3.1% rate by the end of the year, he says it is difficult to see Irish inflation rising rapidly, as the combination of free trade and globalisation has put downward pressure on manufactured products.
