You can hardly blame Charlie McCreevy for an "I told you so attitude" to the latest inflation figures. Having been roundly berated last year as the consumer price index rose inexorably towards 7 per cent at the time of the Budget, the sharp fall in the figure for December to 5.9 per cent seems to vindicate his stance.

It also comes at a good time as he faces an unprecedented ticking off from his peers in the European Union's euro zone.

But behind the bluster, Mr McCreevy will allow himself a little sigh of relief. The fall in the inflation rate is as much a result of budgetary engineering as good judgment. The punitive rise in tax on cigarettes a year ago fell out of the index last month, taking 0.8 percentage points out of the inflation rate and cuts this year in VAT and excise duty on fuel accounted for a large portion of the balance of the 1.1 per cent fall in the headline rate.

That says two things. First, it means the consumer price index is a less reliable measure of inflation if it can be so easily manipulated. Less comforting for the Minister is the message from the figures that inflation cannot simply be laid at the door of rising oil prices and a falling euro, as he and his colleagues were keen to assert last year.