The annual rate of Irish inflation fell to 4.8 per cent in January, fueled by interest-rate cuts that led to cheaper mortgage repayments.
According to the latest Consumer Price Index from the Central Statistics Office (CSO) released this morning, inflation dropped by 0.2 per cent from January 2002 to January this year.
A 0.5 per cent cut in the key European Central Bank interest rate from 3.25 per cent to 2.75 per cent on December 5th, 2002, resulted in a 0.4 per cent drop in inflation from December 2002 to January 2003.
The CSO said increases in electricity charges would not start to affect inflation until March and April this year.
Clothing and footwear costs fell by 13.7 per cent in the month due to the annual affect of the January sales.
The report noted health costs increased by 2.9 per cent, alcohol and cigarette prices rose by 2.1 per cent, and transport costs were 1.4 per cent in January.
Over the 12-month period, the CSO noted that alcohol and cigarette prices rose 11.7 per cent, education costs were 10.2 per cent higher and health costs increased by 7.9 per cent.
The CSO said price rises for alcohol were due to increases in the cost of spirits purchased in off-licences and supermarkets. Higher excise duty drove up the cost of cigarettes, the report added.