Irish inflation drops to near three-year low

The annual rate of inflation in the Irish economy softened to 2.6 per cent last month, down from 2.9 per cent previously.

This was the fourth successive monthly decline in inflation and the lowest reading in almost three years. It comes on the back of a decline in energy prices internationally.

The Central Statistics Office’s latest consumer price index (CPI), the official measure of inflation here, indicated that electricity prices have fallen by 22 per cent in the last 12 months while gas prices were down by almost 19 per cent.

The annual cost of clothing and footwear was also down 6.7 per cent.

Food prices, however, remained on an upward curve, rising by 2.5 per cent.

Mortgage interest payments were also up by 21 per cent on an annual basis, a reflection of higher borrowing costs in the wake of 10 successive European Central Bank (ECB) interest rate hikes.

The ECB is expected to begin reducing interest rates at its next meeting in June.

The CSO’s underlying rate of inflation which excludes volatile energy and food prices remained elevated at 3.5 per cent in April, keeping the financial squeeze on households.

The agency said this is the sixth time since September 2021 that the annual growth in the consumer price index was below 5 per cent, while April was also the sixth consecutive month where the inflation rate was lower than 5 per cent.