Consumer prices fell at an annual rate of 6.6% in October, according to the latest figures from the Central Statistics Office. This compared with a 6.5% fall in September.
Prices fell by 0.2% compared with September. The CSO said sales led to price falls in a number of categories, such as clothing and footwear and household equipment. Lower petrol and diesel prices also pulled transport prices lower, but increases in third-level costs contributed to a 10.9% jump in education prices in the month.
Prices of goods fell by 5.2% in the year to October, while services prices were down 7.7%.
Falls in the annual inflation rate have been hitting levels not seen since the early 1930s this year, with lower mortgage repayments one of the main reasons. But today's figures show that mortgage costs moved up for the second month in a row, rising 0.3%, though they are still down more than 48% over 12 months.
Transport costs were 1% lower in the month, while the furnishings and household equipment sector also showed a 1% drop. Clothing and footwear prices fell 0.9%.
Food prices fell by 0.5% in the month, while prices of alcoholic drinks were also down 0.5%. Natural gas prices dropped by 9.3% after a cut in prices approved by the energy regulator came into effect on October 1.
The EU harmonised measure of inflation - which excludes mortgage repayments - showed a 2.8% annual fall after a 0.2% monthly drop in prices.
Price falls 'deeper and broader' in Ireland
Speaking at a conference in Dublin, Taoiseach Brian Cowen said the 6.6% annual fall in prices meant that the real value of people's take-home incomes had increased by that amount.
'If prices had increased by that amount, there would be loud calls for compensatory pay increases. Equally, the fact that prices are falling must be taken into account when assessing the potential impact of wage and welfare adjustments,' he said.
NIB economist Ronnie O'Toole said price falls in Ireland were deeper and also broader than elsewhere in the euro zone. He said Ireland recorded price falls in nine out of the 12 product categories in October, compared with just five in the euro zone.
Davy economist Rossa White said the figures contrasted with the euro area, where prices were beginning to rise again. He added that this was making Ireland more competitive, though there was some way to go in this process.
Bloxham's Alan McQuaid said price discounting had gathered momentum in the past few months, especially for prices of cars, household equipment and luxury goods, as retailers attempt to stimulate sales. Goodbody's Deirdre Ryan also said signs that price declines were becoming more widespread have continued to emerge, with intense competition in the food and other retailing sectors.
