The annual rate of inflation fell for the second month in a row in October, as lower petrol and diesel prices brought transport costs down.
Figures from the Central Statistics Office show that the annual rate last month was 3.9%, compared with 4% in September. Inflation had hit 4.5% in August on the back of rising oil prices.
Prices were unchanged compared with September. There was a 1.5% drop in transport costs in the month, while clothing and footwear prices fell 1.1%.
These were offset by a 3% jump in education costs, a rise in gas prices and higher average mortgage repayments.
The annual rate of inflation for services was 7.8%, but goods decreased by 0.6% in the year. The EU harmonised rate of inflation was unchanged at 2.2%.
Pat Mc Ardle, chief economist with Ulster Bank said it looks like 4.5% was the peak for the year, though he expects that the rate will bounce sharply next month and be close to 4.5% by December.
He said the annual rate of inflation for the year is now likely to be 3.9%. This will compare with 2.5% last year and will be the highest since 2002.
Business lobby group IBEC, warned that the public sector needs to do more if inflationary pressures are to be curtailed.
IBEC economist Fergal O'Brien said falling oil prices have given some relief, but October saw a 34% jump in gas prices despite lower energy prices on the world market.
The lobby group ISME warned that from a small business perspective, rising costs, particularly for public utilities, were hampering many indigenous companies especially those in the Manufacturing sector, experiencing business cost increases in the order of 10% per annum.
