New figures from the Central Statistics Office show that consumer prices fell by 0.3% in October on a yearly basis on the back of cheaper petrol and diesel, cars, air fares and some food prices.

The CSO said that consumer prices were down 0.5% in October compared to September.

The CSO noted that motor insurance prices fell by a surprising 8.2% in October compared to September, but they remained 8.5% higher compared to October of last year. 

On a yearly basis, the CSO said that transport costs fell by 2% on the back of falls in the price of cars, air fares and lower petrol and diesel prices.

Food and non-alcoholic beverage prices eased by 2.2% due to lower prices across a range of products including meat, milk, cheese, eggs, sugar, jam, honey, confectionary and bread and cereals.

October also saw a fall in recreation and culture costs, mainly due to lower prices for games, toys and hobbies and recording media and information processing equipment.

However, prices in restaurants and hotels rose by 2%, while miscellaneous goods and services increased by 1.9% on the back of higher health, motor and home insurance costs. 

The inflation rate hit its highest level in three years in July, when prices rose 0.5%, but it turned negative again a month later as consumer prices remained muted despite three years of strong economic growth.

Davy economist Conall Mac Coille said that the Irish inflation rate is now close to the weakest in the euro area with sterling's weakness weighing down on import prices.

The economist also noted that today's figures showed that rents rose by 0.9% in October, up 10.1% on the year. 

"It is now almost a year since the Government introduced two-year rent review periods. However, the CPI index capturing new rents shows no sign of slowing down. Indeed, the annual growth in rents at 10.1% in October is the fastest pace since November 2015," he added.