Official figures show that the annual rate of inflation fell back to 2.2% in January, from 2.5% in December.

The inflation rate has now fallen for two months in a row, having hit 2.9% in November.

The Central Statistics Office said prices fell by 0.5% during the month, mainly due to lower mortgage costs and the effect of winter sales.

Clothing and footwear prices fell by 10.7% during January, while prices of furniture and other household equipment dropped by 2.5%. Mortgage interest costs fell 5.6% during January, as recent ECB interest rate cuts were passed on.

Prices in the alcohol and tobacco category moved up 3.5%, however due to higher drink prices in off-licences and increased tobacco prices. Transport costs also rose 1.2% during January. This was due to a 10.8% jump in motor tax costs and rises in petrol (3.9%) and diesel (3.4%) as world oil prices climbed. Air fares fell 11%.

The harmonised EU measure of inflation - which excludes mortgage costs - fell 0.4% during the month to give an annual rate of 1.3%.

DVDs and cauliflower left behind by CSO

The CSO also announced details of changes it has made to how it measures consumer prices from January this year. The last update was in January 2007.

The CSO makes these changes in order to reflect changes in consumer spending patterns. It previously used prices of 616 items to measure inflation. This has now increased to 632. 27 new items have been introduced, and 26 have been deleted.

The statistics body is also making changes to where it collects pricing information, mainly to reflect changes in population throughout the country.

DVDs and CD singles are out of the new index - replaced by MP4 docking stations and music downloads.

For food items, more popular choices have been included, so probiotic drinks replace yoghurts. Smoothies are included, but collars of bacon and cauliflower are out. Fine wines and champagne have been deleted, but flavoured alcoholic drinks have been added.

Factory gate prices rise in January

Separate CSO figures show that factory gate prices - prices of goods before they reach the consumer - rose by 1.4% in January, giving an annual increase of 2.7%.

There was a 2% increase in pharmaceutical prices during the month. Prices of meat products jumped by 8% and prices of computer and electronic equipment rose by 4.4%.

Prices of wholesale building materials rose by 0.2% during January, giving a 2% annual increase. Prices of energy products were up 1.4% in January and up 4.2% over a year. Petrol prices rose 3.4% in January and have risen more than 11% since January last year.