CONSUMER prices rose at a slightly faster than expected rate last month, bringing the annual increase in the inflation rate up from 1.5 per cent to 1.6 per cent.

Much of the rise was due to price increases in clothing and footwear, durable household goods, services and food, according to Central Statistics Office data.

Housing costs fell marginally, with consumers benefiting from further reductions in mortgage interest repayments. The annual increase of 1.6 per cent last month compares with an increase in the EU harmonised rate - the rate used to compare Ireland's inflation rate with the other EU members - from 2.1 per cent to 2.3 per cent.

The euro harmonised rate is higher because it excludes the impact of interest rates, where recent falls have helped to hold down the consumer price index.

The latest small rise in the inflation rate in the Republic is expected to prove to be an aberration, with the downward trend likely to resume in March. Irish Intercontinental Bank economist, Mr Austin Hughes, suggests that further declines in the Irish inflation rate in the months ahead are likely, due to the persistence of strong deflationary pressures in the world economy which will keep a lid on price increases here.

"These influences should overwhelm any tendency towards higher consumer prices due to the softer tone in the euro against sterling or any tendency towards higher prices on foot of the buoyancy of Irish economic activity."

Mr Hughes also predicts that the same downward pressure on prices should produce lower interest rates in the coming months. However, Irish inflation rates are expected to continue to exceed the euro average.