Annual inflation rate remains at 1.2% in January
4.7% increase in the price of education
9.6% decline in mortgage interest costs on the year
4.5% increase in the price of alcohol and tobacco
5.7% fall in the price of telecommunications
3.3% fall in the price of furnishings and household equipment
The annual rate of inflation remained at 1.2 per cent in January, unchanged from December’s reading.
Figures from the Central Statistics Office (CSO) show the consumer price index (CPI) fell 0.5 per cent in the month, in line with a monthly decrease of 0.5 per cent in January 2012.
The most notable changes in the annual figures came from education, with an increase of 4.7 per cent, and alcohol and tobacco, where prices rose 4.5 per cent.
Telecommunications fell 5.7 per cent as furnishings and household equipment fell 3.3 per cent compared with January 2012.
However, transport contributed 0.46 per cent to the overall increase in annual CPI as air fares, motor tax, petrol and diesel prices increased during the year.
Mortgages interest declines also dampened inflation.
Rate cuts from the European Central Bank have reduced interest costs on tracker mortgages, which account for over half of all Irish home loans.
Overall, mortgage interest costs declined 9.6 per cent on the year and 0.1 per cent on the month.
Davy Research economist David McNamara said the figures were in line with expectations.
He added: “We expect inflation throughout the year to remain at around 1 per cent and this doesn’t really change that view.”
Mr McNamara expects figure released today to confirm real wage growth in 2012, and forecasts this will continue into 2013.
He adds: “Nominal wage growth will be pretty decent, though it’s all about inflation and right now it looks like inflation will be getting slightly weaker.
“If you look at the energy price rises we had last year, in terms of gas and electricity that will fall out of the index.
“As well as that there was no VAT increase this year so inflationary pressures are waning and at the same time there’s nominal growth in wages,” said Mr McNamara
“In real terms we’re probably going to see wage growth in 2012 when we get the figures tomorrow and we think that will continue into 2013.”
The CSO added that the annual rate of inflation for services was 1.7 per cent in the year to January, and goods rose by 0.6 per cent.
In monthly figures from December to January clothing and footwear saw the biggest decrease, down 11.1 per cent on the month, due to traditional winter sales.
Miscellaneous goods and services also decreased 1 per cent in the month as lower motor insurance premiums helped push the average price in the sector down.
Health prices rose as the cost of prescribed drugs increased 1.1 per cent in January.
The harmonised European measure of inflation (HICP) was also released yesterday.
Annual inflation registered at 1.5 per cent, a 0.6 per cent fall on the month from 2012.