Inflation in Ireland slowed to 3.6% in October as energy prices fell

Inflation in Ireland slowed to 3.6 per cent in October as energy prices fell, according to data from the Central Statistics Office (CSO).

The agency said the EU Harmonised Index of Consumer Prices (HICP) for Ireland is estimated to have risen by 3.6 per cent in the 12 months to October and by 0.2 per cent since September.

This compares with inflation of 5 per cent in Ireland in the 12 months to September and an annual increase of 4.9 per cent for the euro zone in the same period.

Looking at the different components for Ireland in October, energy prices are estimated to have fallen by 0.3 per cent in the month and dropped 4.2 per cent over the 12 months to October.

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Food prices are estimated to have grown 0.2 per cent in the last month and 6.7 per cent in the last 12 months.

Excluding energy and unprocessed food, inflation is estimated to have risen 4.6 per cent since October last year.

Transport costs have risen 1.2 per cent in the month and 2.1 per cent in the 12 months to October.

The HICP is a different measure of price growth to the CSO’s consumer price index. It feeds into Eurostat estimate of euro zone inflation.

Eurostat will publish October’s flash estimates of inflation for the whole of the euro zone, including Ireland, on Tuesday.

The European Central Bank (ECB) kept its interest rates unchanged on Thursday following a series of 10 consecutive hikes since July last year, amid growing signs that its efforts to fight inflation are having an impact.

The decision was widely anticipated by economists. Still the ECB warned that it will ensure that rates remain high “for as long as necessary” to bring down inflation to its target.

Inflation in the euro zone fell to 4.3 per cent September from 5.2 per cent in August and a record 10.6 per cent last October, but is still running at more than double the ECB’s 2 per cent target.

“Inflation is still expected to stay too high for too long, and domestic price pressures remain strong,” ECB president Christine Lagarde said at a press conference in Athens, where the meeting took place.

“At the same time inflation dropped markedly in September, including due to strong base effects, and most measures of underlying inflation have continued to ease.”

Base effects refer to inflation for the corresponding period last year.