The inflation rate slowed to 3.0 per cent last month, clearing the way for the Central Bank to start cutting interest rates to the levels prevailing across the rest of the euro zone, possibly as early as today or Monday.

In light of growing pressure from our prospective single currency partners for a rate cut, the Central Bank may be keen to have started the process before next Tuesday's meeting of the European Central Bank (ECB) council. Interest rate convergence, which is a key requirement of monetary union is expected to be discussed at that meeting.